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Vishal Mansukhani
The Association of Southeast Asia Nations (ASEAN) treaty is a geo-political and economic organization that is aimed at accelerating economic growth, social progress, cultural development, regional peace and stability, and opportunity for technological expansion. The countries that are members as of 2011 are: Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Collectively, ASEAN has a population of approximately 600 million people, combined nominal GDP of US$ 2 trillion and ranks as the eighth largest economy in the world. The original motive of ASEAN treaty was to connect the member states to boost trade amongst themselves with lessened tariffs and increased investment. However, due to a lack of potential, the ASEAN has evolved as a single entity and ever since 2006, the United States has targeted ASEAN has the fifth largest exporter and has deepened relationships to take advantage of low costs and economies of scale.
After a few slow years, the Asia Business Sentiment Index rose to an average of 70 where a reading above 50 indicates an overall positive outlook. The members have overcome momentary deficits and focused on the sectors that matter most. Here are some of the major business segments that are boosting the business confidence all over Asia:
Rubber
Four of the top five rubber producer countries are from ASEAN (Thailand, Indonesia, Malaysia, and Vietnam) Rubber is the second largest cash crop after rice in the region as the use of rubber is widespread ranging from household products to industrial products. The rubber industry in Cambodia is a significant resource that drives the nation. According to the Economist, Cambodia has annual exports of 45,000 tons which generates $200 million making them the world’s ninth-biggest producer. The prime minister of Cambodia has seen the potential of the rubber market and has been increasing both the large-scale plantations but also smaller producers. According to Radio Free Asia, the promotion of planting rubber has caused the government to expand land area to 400,000 hectares (1 million acres) by 2020. This has led to an increase in quality which has also attracted foreign investments from China and the United States.
Automobiles
The automotive sector in the ASEAN region is definitely the catalyst for trade and export. According to Frost & Sullivan, Thailand, Malaysia, and Indonesia are the three largest producers of automobiles in South East Asia and are all now achieving robust growth.
Thailand, also known as the Detroit of the East, has produced over 2.45 million in 2012 and 1 million were exported. The government of Thailand has managed such success by targeting the pickup truck production rather than the passenger car market. The primary reason for this was top take advantage of the low excise tax rate of three percent compared to the 30-50 percent rate for other vehicles. However, Thailand has also benefited from local consumption as consumer demand increased due to agricultural expansion and high tourism.
Indonesia has gone through a series of up and downs within the market due to extreme weather conditions and financial meltdowns. The production facilities are dominated by foreign carmakers, especially Japan with Toyota, Suzuki, Honda and Nissan planning new production lines and new models in Indonesia. According to the Economist, the growing numbers of people who can afford cars has sparked the economy and showed the potential. Malaysia has excelled in the automotive market by focusing on the locally produced cars: the Proton and the Perodua. Compared with Indonesia and Thailand, the closest rival, there is stable and steady growth of about 2% with positive projection for the next few years.
The future of the automobile industry, according to Business Monitor International, is the production of fuel-efficient “eco-friendly and green cars.” The eco-car in Thailand has been relatively successful in attracting investment, securing at least 700,000 units of new capacity due to its rule of an additional output of at least 100,000 units per year. Malaysia and Indonesia are following the footsteps of Thailand by offering incentives for producing low-cost eco-friendly vehicles.
Electricity
Myanmar is the poorest ASEAN member with annual average income per head estimate of only $824 according to the IMF. The major topic of business interest is the supply of electricity throughout the country. Only a quarter of the country’s 60 million people receive electricity but recurring blackouts are common. The government of Myanmar failed to supply adequate energy as they are concentrated on foreign developments. The rich natural resources have been extracted and supplied to neighbor countries like China and Thailand rather than being used locally. The seriousness of the issue can be portrayed in the following satellite image that shows why Myanmar is known as the “area of darkness.” Thus, the government has created the Myanmar Power & Electricity Summit in an effort to distribute economic activity to benefit the country and develop infrastructure.
Technology Business Incubators
The current trend in ASEAN network is the creation of Technology Business Incubators that are focused on creating a platform to further collaborate and exchange information to encourage and support technopreneurship in the region. Mentors and experts can assist qualified start-ups by sharing database of success formulas, promoting technology transfers, and finding business matches within ASEAN and business plan competitions. All these initiatives attributes to the rise in SMEs and entrepreneurs that wish to survive the early stage of development. With the crucial support by Japan, nearly 30 TBIs in ASEAN have indicated their interest to be part of the ASEAN Business Incubator Network.
Conclusion – Time to put ASEAN on the map
As mentioned above, the ASEAN trade bloc is growing strongly and the region is becoming increasingly attractive after the European meltdown. Foreign investments are leading the way to develop these member states while being interdependent amongst them. The only fear that businesses should be aware of is the probability of dramatic inflation as many countries are still recovering from the Asian Financial Crisis of 2000. The 10 Asean member nations are different, challenges remain on the path to economic integration and sustained growth is dependent on the right mix of fundamentals, policy and confidence. (Business Times) The ASEAN organization members must cooperate and create a successful business story to eradicate poverty from the area.
WPG is keen to help those that are looking forward to trade with businesses in the ASEAN nations. For those interested in potential leads, join WebPort Global today and get your business connected to the proper audience.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| LPAR5 bearing | 5 | 12 | 22 |
| LPBR50 bearing | 50 | 62.35 | 70 |