GEOPOLITICS NOW
DEVELOPMENTS IN THE REGION TO CONSIDER Savvy businesses that have a good understanding of geopolitics could use this knowledge to grow their bottom lines. However, there is a need for head honchos to know “more than they do right now, that’s for sure”, says Parag Khanna, managing partner of data- and scenario-based advisory firm Futuremap.
In a project with Enterprise Singapore, he is identifying potential overseas investment opportunities by identifying trade patterns among all the countries in Asia. “For example, South Korea is investing more in Vietnam; the Koreans have decided that Vietnamese workers are cheaper compared to Chinese workers for everything from automobiles to flat screens and phones,” he says. “So Singapore is asking, how can we make money off that? We can go build industrial parks, finance mobile phone distribution dealerships, lots of things.”
And, while there are fears in Singapore that the Belt and Road Initiative might affect Singapore’s shipping trade, there are many more ways that businesses here are already benefiting from it. “Singapore is actually helping to invest and build special economic zones in Western China and Kazakhstan,” Khanna says. “Singapore companies like JTC, Sembcorp and Surbana are doing work there.”
A geopolitical shift can also create new opportunities. “For example, China and Malaysia have fallen out a bit because of Mahathir cancelling projects,” he says. “So China has decided that the East Coast Rail Line in Malaysia that is not going to happen, is now going to become the Eastern Economic Corridor in Thailand. Suddenly, the Belt and Road Initiative is not going to favour Malaysia as much as it’s going to favour Thailand.”
His prediction on the sectors that are set to grow: manufacturing, services, logistics, transportation and hospitality. “Thailand is a hot country for investors, both prior to the Belt and Road Initiative, and now because of it,” he says.