BRUNEI, as part of
the frontier market, must consider moving away from the "export
mentality" that many businesses in the country are aiming for.
"Exports is the wrong way of thinking about it. It's not exports,
it's about trade, and it's about 'complimentarity'," said Paulius
Kuncinas, regional editor of the Oxford Business Group (OBG), in an interview
with The Brunei Times recently.
With many local businesses aiming for export success, economic experts
are constantly asked on whether the domestic market size will remain an issue
in the coming years.
"No, Brunei will never be, in the traditional sense, a market; it
is a market for funds because there is excess liquidity here, so Brunei could
do well in establishing a private equity or hedge fund industry on your
terms," said Kuncinas.
The key is not to give away capital but to identify private equity
funds on specific industries, for example food processing.
"Focus on the companies, the startups that want to do rice, or
prawns, or the marketing of a product. The future belongs to the regions'
supply chains," said Kuncinas, who observed that
"deglobalisation" is currently occuring in some areas of the world
where advanced economies are retreating back into their home base, while new
giants like China are building more regional supply chains.
"It is the countries that are a part of that supply chain that
will be of high value, and at the end of it, they will succeed," he said.
"The future belongs to those countries because you don't want to
get left behind and that is my main argument to every country that I travel
to," he said, recalling a recent meeting with the Chief Minister of
Sarawak, who spoke of the idea of selling Brunei low-cost hydro power so Brunei
wouldn't have to consume its own power to export Liquefied Natural Gas (LNG) to
Japan.
"So there is this kind of strategic thinking that didn't exist two
years ago, and people are starting to see this for the region as a whole,"
he said. "Exports should be left back in the 90s."
"Countries in ASEAN can work together to provide each other with
services and products that is needed in order to achieve its goals.
"Let's do our job together and make use of this huge demand that
is coming and create a demand for ourselves, that is what businesses should be
thinking," said Kuncinas.
"With the extra revenue that people will come up with, paired with
more money being brought into the country, it would result in money returning
to the economy which allows Brunei to be a 'self-fulfilling economy'.
"Focusing on exports is old-school, where you manufacture here and
sell it to the United States. That's gone, you have to forget about that."
The export industry will still exist on some level, however, for the
nation to focus on additional growth, the next generation of investments will
be very different from the export-based manufacturing economy that Asia saw, he
said.
The OBG is always looking out for new frontier markets, said Kuncinas,
and it has recently been brought to conclude that the ASEAN region could be the
latest frontier market to emerge.
When the Middle East was gaining widespread attention from investors in
the 90s, the attention shifted afterwards to Eastern Europe, Central Asia and
then the ASEAN region. "We came here about five years ago, when it was
still considered kind of a frontier market but not many investors knew about
it," said the regional editor, who was in Dallas, Texas, nearly two months
ago.
"People there were talking and showing interest in the South East
Asian region," he said. "People feel that they've had enough of China
in their portfolio, and India is still attractive but it's very difficult, and
now it is ASEAN, which is a market in its own right," said Kuncinas,
pointing out that Myanmar and Vietnam are opening their doors to investors,
while Thailand is still a growing economy.
ASEAN offers something that all investors are looking for when they are
considering a market, said Kuncinas. They need a place where they can feel
comfortable; has good infrastructure; good command of the English language; as
well as political and legal stability.
"Brunei, in this sense, stands out, especially for investors looking
for new footholds. Many of them are in Singapore and it will continue to be a
big hub, but I think Brunei can use this situation to its own advantage,"
he said.
Kuncinas also proposed some ideas for the creation of new niche markets
in Brunei, with one targetted for the tourism sector silent hotels.
"People are prepared to pay $2,000 a night to escape completely
from noise, so hotel rooms are completely sound-proof and what is required is
just a room and it is not labour-intensive," he said.
"This is what we want to emphasise and this is where Brunei can
have an edge because they can afford to and they have the human capital."
While optimistic on the prospects of Brunei's role in ASEAN, Kuncinas
however said that challenges on the domestic front "unfortunately have not
changed much". "The challenges are structural, and Brunei has to
open-up, it has to reduce the sheer number of steps that businesses need to
take to establish themselves," he said.
"It has to be simplified, and it has to be easy for businesses to
take risks and there has to be incentives."
DEBBIE TOO
The Brunei Times
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com
No comments:
Post a Comment