FROM THE CHIEF ECONOMIST OF THE ECONOMISTS INTELLIGENCE UNIT Preparing for integration South-east Asia is increasingly viewed as a priority by international business. The ten member states of the Association of South-East Asian Nations (ASEAN), dominated by Indonesia, have over 600m people and by 2018 we think their economies will be growing as fast as Chinas and will be as big as Germanys. Thats globally significant. It wont be plain sailing, however. Doing business in the region can be exceedingly difficult. In our assessment of operational risk, which takes into account political, policy and business risks, we rate Indonesia, Vietnam and the Philippines as having a relative risk score of over 50 (on a 100 point scale), with Thailand not far behind. A key problem for foreign firms is the varying welcome they receive across the region: Indonesia recently increased the restrictions on foreign investors in retail and banking, while in Vietnam—despite a generally welcoming government—foreign firms have been the target of violent protests. ASEAN countries are in the process of establishing a free trade zone, with the hope that regional integration in sectors such as automotive will increase the attraction of the region. The rhetoric is good, but ASEAN is notorious for slow progress, so firms wont be betting on a quick conclusion to the negotiations.
Posted on: Thu, 31 Jul 2014 15:18:31 +0000
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