Asean opportunities there to be explored
Recently, the International Monetary Fund raised its growth forecast for the Asia Pacific region to 5.5 per cent in 2017, up from the 5.3 per cent projected six months ago.
The adjustment is largely due to more optimism around the growth of China (6.6 per cent) and to a lesser extent Japan (1.2 per cent).
The Asean economies are expected to grow at a healthy 4.9 per cent.
Myanmar, Cambodia, the Philippines, Laos and Vietnam are all projected to grow faster than 6.5 per cent. Indonesia, the largest economy in Asean, is expected to grow at 5.1 per cent.
And while the Asia Pacific region as a whole might slow down in 2018, we can expect to see Asean grow.
Most Asean economies are continually working on ways to improve their ranking in the ease of doing business index.
They are focussing on measures that will benefit foreign companies such as reducing procedures at customs.
In most cases there are specific targets.
For example, the Philippines is aiming for the top 25 or even 20 per cent in the index. This is an ambitious but achievable target, and it is making progress. It was ranked in the top 55 per cent in 2016 and 52 per cent this year.
Indonesia is working hard on balancing domestic consumption and foreign investment.
It has increased government expenditure and now provides financial support to small and medium-sized enterprises to encourage domestic growth.
At the same time, the country has relaxed restrictions on foreign ownership in various industries to allow greater foreign participation.
For some time now, Vietnam has been opening itself to foreign businesses.
This has highlighted the need to bolster its intellectual property (IP) regime.
It is hard to imagine high-tech companies and major multinational companies engaging in this market if they can’t be assured of IP protection.
Like the rest of the world, Asean economies are also keen to sow the seeds for home-grown success.
Corporate tax cuts, competition policy and branding exercises are just three of the more common tactics to help local players.
Nonetheless, most Asean economies are still developing various regimes to engage internationally, so it will take time.
Using external pressure such as free trade agreements is a way for Asean to seek learning opportunities.
Many opportunities in these economies are unexplored, possibly because we are less knowledgeable about these countries.
Our learning can be facilitated through collaboration with local players, and sharing of information.
Likewise, local players and these markets could benefit from foreign participation in the form of good products, services and practices.
So the signs are looking good for foreign players who want to step into Asean. New Zealand businesses have much to offer.
My usual advice still holds, though – start small with one to two cities in one country at a time.
Siah Hwee Ang is the BNZ chair in Business in Asia at Victoria University of Wellington.