The first session for the day had a macro economic approach and started with a panel moderated by Ambassador Ong Keng Yong. The discussions encompassed the role of Southeast Asia as the new growth engine of the world, impact of free trade agreements and the relative position of ASEAN compared to China. Each panel member got two minutes to highlight some main points of view which they wanted to address, followed by a Q&A session.
In relation to the statement that Southeast Asia is the new growth engine of the world Mr Manu Bhaskaran, Centennial Asia Advisors Pte Ltd stated that:
“Key evidence is in the numbers. Over the past 25 years, investments in ASEAN give a return on capital that outperforms the world average. The return potential is huge. After the 2008 crisis the ratio of private investment to GDP fell but is now rising again. This means automatically a higher GDP growth.”
Tan Sri Dr Mohd Munir Abdul Majid suggested looking at the big numbers with a bit of cynicism and measuring what is actually happening on the ground. He reminded the audience “Future prospects is not current reality”.
He meant that development and growth is not happening as one ASEAN but is divided in several parts. For example consider the differences in “Mainland Southeast Asia and Maritime Southeast Asia”.
Dr Muni also mentioned four main growth sectors where Swedish companies can make a difference; Agrifood, Healthcare, Retail, Logistics & ecommerce.
According to Mr Sean Yokota, Head of Asia Strategy, SEB there are three main drivers for businesses to consider Southeast Asia’s relative value to China:
- Growth story and the prospects of growth of Southeast Asia, based on the fact that China’s growth will be slowing down within the coming 5 years.
- Cost phase – the lower production costs compared to the average 600-dollar salary in China and the 200-400 dollar average in different parts of ASEAN.
- Predictability and transparency of the ASEAN markets instead of the suspicion about figures and moderated market information coming out of China
David Hoffman, the Think Tank Conference Board would like to stress China and ASEAN not “or”. He also wanted businesses to think about how much will China’s development impact your business.
One of the areas that repeatedly came up during discussions and the Q&A session with the audience was data protection, data security and data management. These growth areas were considered as highly interesting and in much need of collaboration over the boarders and with Western countries. Here are great opportunities for Swedish businesses.
Concerns were raised over growing anti-globalization sentiments, in the ASEAN region as well as globally, in relation to the free trade agreements like the TPP and RCEP. Several panel members meant that people don’t really see how free trade will impact their everyday life and might affect the perception of globalization as a threat rather than an opportunity. Nevertheless, the common view seemed to be that businesses in general consider them highly beneficial.
To address the concerns, the recipe is communication on how these free trade agreements actually impact people and businesses and acknowledges the need of education.