In a stirring speech to the nation, President Joseph R. Biden, Jr. stamped his brand of leadership on the presidency, in his first act as the 46th president of the United State of America, it signaled several shifts. Perhaps the weather was foreboding with snow falling before the ceremony that was later bathed in brilliant sunshine. A hopeful metaphor of what promises to be a presidency at the confluence of multiple crises both domestic and abroad.
The pageantry of procession that was inauguration day will be fast replaced by the stark reality that are the challenges faced by the nation. If only to understand Malaysia’s 5th largest investor and 3rd largest trading partner better, Malaysian companies need to understand the priorities of the current President of the United States.
While it’s unlikely that there will be immediate benefits to Malaysian business from the change in the White House, over the course of the next 4 years the strategic policy shifts and promises to stay the course on what has fast become the established US position should yield considerable opportunities.
One such door that will be opening was unlocked when the President Biden signed the executive order returning to the United States to Paris Climate Agreement. This return to the legally binding international treaty on climate change designed to reduce greenhouse cases will have a direct impact on US based companies. It’s a positive move for the environment and at the same time a chance to participate in what will be a monumental change from now until 2030.
This rapid shift to a greener industrial model will set two trends in motion. Firstly, the US will generate demand for green technology, including the production of physical technologies that will be consumed in the US. This will mean the creation of multiple global value chains with the US as the end consumer. With some countries off the radar as a cost-effective manufacturing base it will allow Malaysia the opportunity to fill the breach. Not to mention that Malaysian based innovative technology should find its way to the US.
Secondly, it will mean that the US itself will further strengthen its’ domestic green tech industry. History has shown us that the US corporate sector will look globally for growth and market share. Once international travel is again possible in a meaningful business development way, it will see US companies look to ASEAN and indeed Malaysia for expansion. It’s this second trend that Malaysia’s regionally focused players can look to partner.
Regardless of the president in the White House, Malaysian companies looking to take their place on the global stage must work towards achieving sustainable global conduct. Those in the global market need to play by the global rules especially companies in critical supply chains as competitors and interest groups are more than happy to highlight short comings.
COVID19 and the process of change will ensure that it will take time for the wheels to turn. For those with the aspiration this is the time to gear up for the opportunity, to put in place the governance and standards that will allow corporations to step through the door that is now opening.
Welcome to the White House President Biden and Vice President Kamala Devi Harris, there is much to achieve and a constant need to move forward. Looking at the future and to borrow from President Biden when he asked in his inaugural speech “Will we meet our obligations and pass along a new and better world for our children? I believe we must and I believe we will.”
Additional Comments following recent developments: The industries which have been impacted by gaps in the policy and regulatory understanding coupled with gaps in implementation of ESG programs are the glove and palm oil industries. There is a need to develop both broader and deeper stakeholder engagements to improve the sustainable future of the companies involved. Other outward facing industries need to be prepared for potential crisis if they fail to address any gaps they may have.