At the Milken Institute Global Conference in Beverly Hills a panel discussion on Southeast Asia provided data, history and empirical experiences that all point toward the ASEAN member states continued economic growth. Moreover, the panel suggested the ten ASEAN member states – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – should be the primary destinations for businesses looking to expand in Asia and investors looking to invest in Asia now and for many years to come.
The ASEAN region is set to launch the ASEAN Economic Community (AEC) on December 31, 2015. The AEC is designed to replicate all the positive attributes and economic outcomes of the European Union while avoiding the EU’s missteps such as their common currency. Data presented by the panel showed that GDP for the combined ASEAN region rivals the GDP of India plus the Gulf Cooperation Council states. The over 600 million people in the ASEAN region collectively make up the 8th largest economy in the world without the AEC in place.
Panelist Paul Wolfowitz brought many relevant credentials to the panel including being former U.S. Ambassador to Indonesia and former president of the World Bank. To understand the size of the region he pointed out the geographic size of Indonesia’s archipelago in terms of the map of Europe would stretch from London to Moscow. He pointed out that whereas China is approaching a demographic cliff due to it’s one-child rule, the ASEAN population is younger (65% are under 35) and region-wide GDP growth is averaging 5%. While not hesitating to point out that there are degrees of corruption in the ASEAN countries, Mr. Wolfowitz feels confident doing business in ASEAN nations is more transparent and secure than in China. Vis-à-vis discussing measures of corruption, Mr. Wolfowitz has seen that ASEAN countries react positively when they get lower rankings on reports such as the World Bank’s ease of Doing Business report, and are nations that look to and “keep solving problems.”
Mr. Charon Wardini bin Mokhzani is executive director of Malaysia’s strategic investment fund, Khazanah Nasional Berhad. Mr. Charon pointed out that while there have been historical tensions between the countries within ASEAN, ASEAN was indeed formed to foster peaceful relations between the countries. He took the conversation back to the 15th century to point out a precedent for peace and prosperity within the region where they balanced being situated between three major economic powerhouses in today’s China, India and Middle East. He feels today is quite similar except there should not be any Portuguese pirates arriving upon their shores to foul up the economic community they are developing.
Mr. Wolfowitz and Mr. Charon both also pointed out that ASEAN operates on a policy of consensus. On the one hand, this means the AEC region will take time to work out the various moving parts of community agreements. On the other hand, this ensures that when countries ranging from Singapore to Laos come to a common accord, the community will be unified in a solid foundation.
Kirk Wagar, the U.S. Ambassador to Singapore, summarized the sentiment of the panel, “if you’re doing business in Asia, don’t get sucked into China, there’s a better opportunity” in ASEAN countries. He added that Australia and New Zealand have trade agreements with ASEAN countries and that the ties between these nations are also increasing. He believes the successes of today in the region are only a hint of the successes coming in the future.
While the panel tried to make cases for risks to development of the region, all panelists almost as quickly deconstructed the case for risk back to the case for the rewards and promise of the region. Mr. Wolfowitz pointed out that the countries with the lowest GDP in the region, Myanmar and Laos, also have the highest GDP growth rates. The composite picture for region is one of opportunity and growth.
The complete one hour panel discussion is below.
ASEAN A Better Investment Than China For Businesses And Investors
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