Sorry for my recent silence. Many of you will know that I moved from Sydney to the Philippines last year and have been taking some time to work out where I can add most value. I am still working hard to maintain and grow my China-Hong Kong-Australia ‘bridge’ (including my role as Global Ambassador: Australia for Cyberport, HK’s leading technology hub) and I will have more news soon on a dynamic new platform I am building with my Australian partners to invest in entrepreneurs with ambitions to take their innovation global. But, with your permission, I would like to continue sharing with you my regular insights on what’s happening in Asia and why it matters. If your inbox is already too full and (like most people) you have more news than you can handle from the US, feel free to unsubscribe at any time using the link below.
I am intrigued and encouraged by the Australian Government’s strategy to increase exposure to South East Asia (see Invested: Australia’s Southeast Asia Economic Strategy to 2040) and, with the success of the Labour Party in the recent election, I assume we will see a lot more activity (i.e. missions, delegations, events, conferences, trade shows) in this part of the world in the coming 3 years.
But the starting point is very low. Over the past 10 years, Australian investment in ASEAN has halved during a period in which China and the USA have doubled their exposure, and Canada’s investment has quadrupled. There is a lot of catching up to do which will stretch the capabilities and resolve of our investment industry whose current focus is mainly in the USA and Europe.
According to the report: “as a regional bloc, by 2040, Southeast Asia is projected to become the world’s fourth-largest economy, after the US, China and India” and “analysis by the EIU estimates that, in 2022, total nominal GDP for Southeast Asia was worth US$3.60 trillion and by 2040, total nominal GDP will grow by nearly 383% to US$13.86 trillion“. These are big numbers and the Government is right to highlight them and encourage more engagement. The question is whether the private sector will follow their lead.
But doing business and investing in SE Asia has its challenges. As I walk around local shopping malls and supermarkets, I mainly see American, British and European brands who I’m told have been here for years. And most SE Asian markets are dominated by at least five prominent families whose tentacles reach into all corners of infrastructure, real estate, energy, telecommunications, hospitality and retail. Having neglected the region for years, Australians will need to work hard to develop local relationships, build trust, show long term commitment and invest in local people to realise their ambitions. And of course there are some major language, communication and cross-cultural challenges to overcome. I’ll have more to say about all of these in future issues.
However, the last time I looked, the 2021 Census in Australia identified ‘Asian Australians’ (i.e. immigrants from Asian countries and their descendants) as comprising roughly 17.4% of the total population. That’s a total of nearly 5 million people, the size of one of Australia’s largest cities. Working with them might be the best place to start?!
