CR: What is interesting is even though the COVID-19 crisis didn't play out across south-east Asia in terms of a large-scale pandemic on the ground and mass infections, the economies in emerging markets like Laos were still quite impacted.
In Laos we were seeing quite a lot of foreign investment, particularly for up to 2017, around the resources sector. And there was a lot of positivity in the region.
But over the last couple of years we've been subject to the rise in the protectionist policy seen in a lot places, a general pushback against globalisation. That meant when COVID-19 hit, it really had an impact in terms of FDI.
At ANZ, our fate in the region is very much tied to the FDI that comes in. So the way we look at it is ‘how do we help position Laos as an investment destination?’ We need to encourage that investment and help offshore interests to understand the environment here, what the opportunities are, and what the risks are, and help them grow.
RP: Absolutely. And a big part of that growth in modern time is based around digital and data. How are you seeing your customers cope with that change?
CR: Yeah, we’re seeing that a lot in our transaction banking services, and the way a lot of our relationships with our customers are evolving.
The way that we look at digital and data is not just around the shiny front interfaces, but also the way we can improve. Things like single point of entry, no double handling, no single point of failure, for example.
We're looking at everything from when a new transaction gets keyed into one system. And we put a little red flag on anything we can automate and look to improve on.
With digital, a lot of the change actually requires someone to stop and say, 'hang on, is there a better way we can do this? Why do we do it this way?’
There are a lot of people who might continue to do things because it's the way it's always been done.
What we're doing in terms of culture is training people to challenge this thinking. And not just within ourselves but with customers.
RP: I like the way you touched upon culture because data and digital has, in my view, a lot to do with the evolution of mindsets. The culture of embracing change.
We are so used to going back to our old ways of doing things that we often don’t, like you said, question the way we do things. It's about thinking, how can we make this place a better place for our customers, a better place for us?
Data and digital is not only about the nice shiny bits like you said, but getting into our processes, into how we make things easier and simplified for our customers.
CR: You’re right when you mention mindsets. At ANZ we’ve tried to embed that digital mindset, that kind of ‘always learning’ and continuously improving mindset here. Some of it has come from exploring what we've already got but haven't tried before.
RP: COVID has had some significant impacts in terms of supply chains in the region. How are you seeing those changes impact in Laos?
CR: It's a really good question. As we spoke of before, the decline in foreign inflows has made it more difficult in recent times as international companies really pull into their core markets or home markets.
But that being said and done, COVID has meant we've seen some big international businesses kind of pivot on a dime.
Through COVID we’ve seen them try to minimise capacity, create virtual teams and trading floors and switch business models and products online. Many have gone direct to consumer rather than relying on physical distributors. It's been a really big change.
I think Vietnam in this region has done a phenomenal job of lobbying to capture some of the manufacturing base that has been shifting out of China. In Laos we want to get a piece of that pie!
Laos has the lowest labour costs in Asia and a very young population, with an average age of 23. With recent infrastructure investment from policymakers, I think it's really well positioned to bolster its manufacturing sector.
And the location means you can have a company manufacture here and then put the product on a truck and get it to China, the biggest consumer market in the world, in just a couple of hours.
Laos has quite a good opportunity in that space to capture and be a manufacturing and shared services hub for some of these big consumer economies.
And I feel really confident around the macroeconomic drivers for Laos going forward, even amid the impact of COVID.
RP: In the Philippines, there is no doubt true on the direction of supply chains are moving at the moment. There been a systemic shift in the relations between China and the US recently.
In some cases, Chinese companies are now keen to expand their manufacturing facilities outside of China because it is no longer the cheapest place to do so. You've got large state-owned enterprises looking at different markets.
The shift in supply chain dynamics is real and in the Philippines, I think the opportunities lie with policymakers to try to take advantage of that.
Shane White is Content Manager at ANZ