If you take the time, you’ll find the opportunities in south-east Asia are diverse. Below, we take a closer look at two such economies and the opportunities therein.
The Vietnamese economy grew by 7.1 per cent in 2018. The first quarter of 2019 again expanded 6.79 per cent. It’s one of the most-interesting economies in the region – a market of 90 million people with a median population age of 30.5 years and very high level of literacy.
This outstanding growth is the result of years of work by investing in areas it knew it needed to drive its economy. This includes signing a number of free-trade agreements; at last count, roughly a dozen.
If you've been to Vietnam in the past it’s advisable to not let your thinking be shaped by what you saw 20 or even 10 years ago.
Modern Vietnam is focused on developing infrastructure, standardising its border activity and creating a framework for attracting foreign-direct investment. And that's really driven some massive changes.
No longer simply the world’s textile factory, the number-one export out of Vietnam is now mobile phones. Vietnam manufactures one in 10 of the mobile phones produced in the world. It represents 21 per cent of the country’s total exports.
In recent years South Korean electronics giant Samsung has invested tens of billions of US dollars into Vietnam, with plans for more.
In other industries, the Mekong Delta is among the most-productive regions in agriculture and aquaculture on the continent. The country is also blessed with a maturing consumer services sector, sound manufacturing fundamentals and numerous infrastructure opportunities.
The key driver of all this change in Vietnam is a well-educated young workforce supported by robust infrastructure that has created an ecosystem of opportunities for business to tap into.
India is getting easier to navigate and harder to ignore.
An economy of 1.3 billion people with a GDP growing at 7 per cent is not to be dismissed. Advances in the use of technology in India are happening at a scale unseen anywhere else and it is creating a vast array of business opportunities.
India is no longer held back by legacy or structural decisions because of these new technologies and demand to think differently. It’s got scale. It's got demand. It’s got big pockets of consumers.
There’s no doubt in the past it has been a challenging market. Many Australian and New Zealand businesses have struggled in India during past years and some continue to.
But the focus of the Modi government is making it easier to do business in India and we’re seeing progress. In November, India was named 77th in the world for ease of doing business – up 53 notches in just two years.
We’ve said things in the past like Australia and New Zealand are underweight India. For such a large economy it’s been comparatively overlooked. The reasons are complex; an obvious one is a lack of FTA deals (which both Australia and New Zealand have with China, for instance). China is also easier to get to through a direct flight.
With the recent changes some of the complexities of India have dissipated. The country has effectively taken away its borders at state-level yet with the introduction of a goods-and-services tax and changed its sales taxes within the regions, something businesses used to find very hard to understand.
So India is getting easier. The market is growing. And of course, like Vietnam, India is not really a topic of the trade tensions between China and the US. In fact, anecdotally it's one of the markets businesses are looking to shift their supply chain to in the wake of the tariffs.