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How is Southeast Asia wooing investors?

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​30 April​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ 2015

How is Southeast Asia wooing investors?​

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​Credit: OPgrapher / Shutterstock

Southeast Asia is rapidly growing, helped by leaders who are supportive of industries and trade – and investment opportunities abound, according to JLL's delegates at the World Economic Forum.

The forum on East Asia 2015, held in Jakarta in April, was noticeably smaller in scale compared with previous sessions. However, fewer attendees did not take away the fact that ASEAN (Association of Southeast Asian Nations) within East Asia is a powerful economic region because the opportunities to invest are immense, says Chris Fossick, JLL's Southeast Asia's managing director.

Politically, the region is now supported by a stable and business friendly Indonesia, led by a very down-to-earth and hands-on leader Joko Widodo, he adds.

At the forum, Widodo's opening address was broadly a sales pitch to business leaders. His suggestion that "if you have any problem, call me" not only made news headlines, but also underpinned his resolve for reforms in Indonesia, Southeast Asia's biggest economy.

"The big takeaway for me from the forum is the positive energy and enthusiasm for Indonesia and ASEAN in general and that the new government is very much open for business," says Todd Lauchlan, JLL's head of Indonesia.

Businesses benefit from political stability

Strong leadership in Southeast Asia has helped to establish stability in the region's political climate, which is good for business, says Susheel Koul, the managing director for corporate solutions for JLL in Asia Pacific. Koul also noted that Myanmar, the region's newest frontier economy, had sent a big delegation. "ASEAN is a good place to be in 2015-2016," he adds.

Fossick also has a positive outlook. "Although the launch of the Asian Economic Community has been postponed until the end of this year, the nations within the trade bloc are really committed to it and it will grow and take form," he says. "It is not easy; ASEAN has many barriers that Europe does not have. ASEAN countries are at varying stages of developments."

He points out that it's very difficult to get an economic pact together in the same way as the states of America or Europe when one country has a GDP of US$1,600 per capita and the other US$50,000 per capita.

"However, ASEAN is a vibrant market place with economic benefits; every corporation should have a strategy around ASEAN," Fossick stressed.

Focus on technology

Jeremy Sheldon, JLL's managing director for markets in Asia Pacific, says technology is a key theme at the conference. In Asia's fast-developing markets of Indonesia and the Philippines, development of a robust and reliable technology infrastructure has lagged behind.

"For example, a lack of robust IT architecture that can adapt to changes in the landscape in an efficient manner means that available data is not always current," Sheldon, said in a blog post entitled How can East Asia make the most of big data? for the World Economic Forum. "The speed and scale of construction and infrastructure development – in Indonesia and the Philippines, for instance – means that satellite maps are continually out of date."

And while countries such as Singapore are taking steps to improve data transparency although there is still a general lack of publically available data – along with the wider issue of security concerns about data protection.

Such challenges go hand in hand with the opportunities in the Southeast Asia growth story – it may not always be a smooth ride but it will be an exciting one.​