The Association of Southeast Asian Nations (ASEAN) presents a fertile but challenging opportunity for Sri Lankan businesses, HSBC Asia Pacific Commercial Banking International Markets head Tim Evans said.
Addressing the Daily FT-University of Colombo MBA Alumni Association-organised and HSBC-supported CEOs Forum under the topic ‘ASEAN: Sri Lanka’s Next Big Opportunity’, Evans outlined the opportunities that existed in ASEAN.
“ASEAN is home to some of the fastest growing economies in Asia and the world. The potential economic and demographic dividend that ASEAN presents is greater when the region is treated as a whole. If you look at the ASEAN consumer, their 650 million inhabitants are an increasingly powerful source of global demand, and potential game changer for companies that are looking for growth in an often uncertain global environment. So for HSBC, building and maintaining trade corridors with ASEAN is a very sensible way of achieving growth. This is why we have Sri Lankan apparel companies expanding their footprint in Myanmar and Indonesia. ASEAN is not an easy market to tap, companies need to tag their business models to the breath-taking diversity of ASEAN. A one-size-fits-all recipe will simply not work.”
However, he also pointed out the disparity between the different countries, noting that Singapore has a per capita income that is 40 times that of Cambodia, while internet penetration is barely present in countries like Myanmar. The bloc also includes a range of political and regulatory systems, which could be difficult for a business to navigate.
“ASEAN’s full potential is still not fully appreciated. Yet the region’s economy of $2.6 trillion is already the seventh largest economy of the world, and by 2030 it will be the fourth largest economy in the world. Accenture estimates that annual consumer spending will rise by $2.3 trillion by 2020, which is roughly 80% higher than the 2012 level. The number of middle class households in ASEAN will top 120 million by 2025, roughly double what existed in 2007. I would like to see today as a conversation starter to what ASEAN can really offer all of you. Is it really your next big opportunity. If you believe this, as we at HSBC do, then our in-depth knowledge of the region and our strong presence in Asia will provide you with the expertise required to navigate the opportunities with ASEAN.”