Saturday, 3 September 2016

ASEAN growth economy view by South Korea's Ambassador

Like most people I suspect, if the South Korean Ambassador to ASEAN gives his views on improving the ASEAN economy, then I pay attention and take notes.

Suh Joong-In writing in the Bangkok Post and Jakarta Post makes some good retail points in particular, last week.

South Korea of course is one of the Asian tiger cub economies driving blistering growth and prosperity in just a few decades. Short-circuiting a process that took hundreds of years, if at all, in most countries. And after having been successfully bombed back to the Stone Age during the Korean War.

Ground Zero indeed.

In my MP candidacy I talk of the Meiji reforms needed in UK – as successfully implemented in Japan then South Korea by its governments and chaebols after 1953 in rebuilding a divided and destroyed nation.

The sparkling lights of Seoul’s skyscrapers, dulcet tones of K-Pop and fizzing internet economy are testimony to the South Korean success. As is the lights-out poverty and famine in neighbouring North Korea. The test tubes of North Korea and East Germany are the proof of the failure of a centrally-planned and nationalised and bureaucracy-heavy economy, and dictatorships.

Suh Joong-In cites his Khon Kaen-Laos journey of over 4 hours to Savannakhet SEZ. And the white-hot heat of Japanese investment so almost-all Nikon cameras are made in Thailand. Then surely, as with Hitachi and the Red Line of Thailand’s hi-speed rail, the potential is also for improved transport links in Isaan and Laos to capitalise on such investment?

And to bind together Thailand’s far-flung provinces such as Isaan and the Deep South and North for shared prosperity with Laos?

A rising tide of success that will lift all ASEAN’s boats?

The Climate Change era means the end of slash-and-burn mega-transport policies merely blazing a trail through farmland and forest. Enough of ASEAN’s forests have been chopped down or burned down.

But, the various Australia-Lao friendship bridges across the Mekong allow greater connectivity with Vientiane, Laos’ capital city, through to Vietnam – and crucially to the deep sea port at Vinh. A second Haiphong if you will, which is in Vietnam’s interest to ensure there isn’t over-reliance on just one port in the Red River Delta, and to ensure speed of freight to Central Vietnam and Laos.

Such connected routes would ensure the ASEAN promise of triple-growth with Thailand, Laos and Vietnam.

And leaving petty nationalism aside, for geography and demographics, almost all of Laos’ 7M population is clustered in 3 large cities on the Mekong riverbank opposite Isaan’s main cities.

All with a very similar culture and language.

It’s an instant and somewhat neglected market of c.30M people (about the size of Australia or Canada) waiting to be plugged into the Pacific trade routes via Vinh to Japan and Korea and Australia, ASEAN’s Philippines and Indonesia, and USA, Canada and Latin America.

And surely such economic growth would be a spur for cultural innovation say one of my favourite TV channels in ASEAN is Lao3 which must be ripe for content-sharing with PBSThai or BBCTV or CBS in USA – the latter home to the Lao and Khmer diasporas?

And Suh Joong-in points out the wider potential of an ASEAN SME2050 market strategy from such logistical cores, whether individual brands such as P&G shampoo or Lottemart retailers in Indonesia.

The latter as with 7-11 in Thailand or CircleK in Vietnam must be best-placed for retailing – South Korea’s Lottemart already working closely in a JV with Netherland’s Makro and potential for UK’s Tesco Lotus.

While aberrations such as the worrying growth of Total petrol stations in Philippines – now closed down in East Kent after war crimes designations by USA from Myanmar – could be tightened through such a 2050Strategy?

And South Korean chaebols such as Samsung and Hyundai for mobile phone growth and shipping logistics must be relevant for such retail activity. As with Kawasaki in Japan, and similar zaibatsu, and its landmine clearance vehicles, the chaebols are end-to-end suppliers with lots of potential in ASEAN.

For Hyundai for example, Indonesia’s wholesale purchase for the East German navy must now be a sunk cost with a resulting huge potential in ships, ferries, coastguards and even UK’s RNLI and helicopters.

Lottemart or 7-11 would also be perfect conduits for say condom brands and factories in delivering a massive drive to end HIV infections in Asia and Africa. South Africa recently declared its National Plan for 2050 to reduce the horrifying 150,000 HIV deaths. A social programme that UK has been active on, also Eire recently reintroducing blood transfusions, and Thailand’s innovative Cabbages and Condoms programmes.

Retail initiatives in ASEAN could be key parts of Suh Joong-In’s 2050strategy, such as free and subsidised tampons and sanitary towels as in NYC prisons, and subsidised in UK and EU with the end of the tampon tax. While Unilever’s Lifebuoy soap CSR handwashing programmes work in Kenya is sparkling, and only just begun in Indonesia and Vietnam.

And briefly, such ASEAN2050Strategy would help steer ASEAN’s SME’s through the haze of Climate Change with both a comprehensive tourist plan and Climate Change plan to help subsidise moves to electric cars and the too-numerous fleets of refrigerated vans on the roads.

Such moves would stimulate Future Thailand economic activity on autoparts, Indonesian autos given the exit of Ford, and say new VW factories for the greater Circular Economy in the wider Asia-Pacific.

Indeed just in tourism the growth is huge - this week the UK Post Office published its Travel Money Fastest Growing Currencies report (the GPO responsible for 25% of UK holiday money sales) on UK tourism to Latin America – obviously the Brazilian real was higher at a 70% year on year increase, given the Rio Olympics in 2nd Place.

But Costa Rica was first for an 84% increase in tourism. And both Peru and Chile showed increases of 19% and 23%.

ASEAN should capitalise on such Asia-Pacific growth - especially with the G20 Summit in China kicking off Climate Change - both the Paris Agreements and Obama in the Midway huge eco-zone - and AIIB/ADB activity.

Suh Joong-In’s innovative Economic Plan would stimulate more than Lottemart in ASEAN.

Time for Change

Tim Garbutt is Director of Surin Village School Charity, Director of Sincerity advertising agency and standing for UK Parliament in 2020 and Kent Leader in 2017.


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