I’m writing this editorial from a hotel in downtown Bangkok. The previous evening I had a conversation with media pals about the reported delay in the Thai elections – possibly a further 20 months away as arguments over the constitution rankle on.
The economy is stalled, real tourism – that brings in dollars rather than inflated arrival figures – is declining and the baht is in free fall against the greenback. Yet, despite all the doom and gloom, across the road from me the foundations are being driven for yet another high-rise condominium or hotel, and talk of further shopping malls defies belief.
Thais have an innate confidence that things will turn out alright on the night. The Teflon economy has survived successive coups and financial crises to record year-on-year growth. So why should the current situation be any different?
Perhaps the doom-mongers are premature, but as the country takes an ostrich-like approach to democracy that is only rivalled by Myanmar within the region, other countries are ready to assume Thailand’s seat at the high table of trade. Free Trade Agreements (FTAs) and Trans-Pacific Partnerships are all the rage, as the EU and the US finally wake up to the enormous potential of the 600-million trading bloc that will come into force at the end of the year. The potential EU-ASEAN FTA deal could be worth up to 20 trillion dollars.
To take just one example, UK Prime Minister David Cameron chose ASEAN as the destination for his first official visit outside of Europe after securing electoral success earlier this year. ASEAN Forum has an exclusive interview with his newly appointed trade envoy for the ASEAN Economic Community (AEC), the Gloucester MP Richard Graham, about the potential for business between the UK and ASEAN.
With an EU-Singapore FTA already signed, Vietnam seems to be the next country on the list, following a recent break-through after two-and-a-half years of negotiations. Perhaps, by the time Thailand manages to break free from its constitutional manacles, it will discover that the boat has already sailed, and most of the juicy trade deals are already signed.
Challenges and opportunities; when you ask people what they think of the forthcoming AEC, you are bound to encounter one of these answers, depending on whether the responder is a half-full or half-empty type of person.
This applies to Cambodia as much as any other country in the region. Low-wage levels and relative ease of doing business – despite what the World Bank might think – make the country an attractive opportunity for regional investors. But low-skill levels and a potential lack of preparedness could leave the country vulnerable to its more economically advanced neighbours once the new trade bloc is formed.
ASEAN Forum looks at the country’s financial sector to ask how ready the kingdom is for entry to the AEC, as well as considering the argument for de-dollarising the currency, or as Chea Serey, the director-general of the National Bank of Cambodia, prefers to call it – “promotion of the use of the local currency”. By the time this magazine is released, both topics will have been discussed at the BritCham ASEAN Forum Question Time debate on the Future of Cambodia’s Banking Sector at the end of September.
With micro-finance institutions and the rise of social enterprises in Cambodia, Thailand’s magnet for economic migrants, Yangon’s endangered architectural heritage, a Q&A with Filipina brewmaster Toni Marie Despojo, and a look at some of the latest book releases, I trust that you find ASEAN Forum your essential guide to doing business in the region.
If you have any questions on this or any other issue, please email me at: email@example.com
Mark Bibby Jackson @BibbyJackson