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Keeping the beacon of growth alight
IN a world that is constantly shifting, change is the only constant we’ve come to embrace. But in a global village that is becoming more interconnected, certain changes can create a domino effect that shakes up even the most resilient and adaptive of businesses. As the reality of Donald Trump and his impending coronation sinks in, questions are already being asked and autopsies conducted.
“Campaign in poetry, govern in prose,” American politician Mario Cuomo once famously noted, and this is in line with the opinions of the speakers and guest panellists at day two of the Outlook 2017 seminar, where the big question on everyone’s lips was: “Which Trump will turn up at the table?”
The final instalment of the Canon Think Big Leadership Business Series, Outlook 2017 examines events of 2016 and their varying repercussions on the business environment in the near future. Held at the Marina Mandarin Hotel ballroom on Nov 16, the seminar focused on the impact of the Trump administration on Asean economies. Organised by The Business Times with support from Canon, the event sought to disentangle the early confusion of the US election result and inject a much-needed boost of positivity in times of incertitude.
Three enlightening presentations by Prof Joseph Liow, Mr Ivan Tan and Prof Lewis Lim were followed by an interactive panel discussion moderated by Vikram Khanna, Associate Editor of The Business Times, and featured guests panellists Prof Andrew Delios, Head of Department and Professor of Strategy and Policy, NUS Business School, and Mrs Judith Fergin, Executive Director, American Chamber of Commerce.
Continuity or change?
First speaker Prof Liow, Dean at the S Rajaratnam School of International Studies, NTU, opened with his talk titled “The New American Administration and Asia Policy: Will it be business as usual?”, where he coherently unpacked aspects of Mr Trump as President-elect and some of his policy positions. “Will we see a more measured and mellowed approach from Trump, or will he proceed with his initial claims?” posed Prof Liow as he noted the difference between campaign rhetoric and reality of governance.
An important consideration some might have missed in light of recent developments was Mr Trump’s relationship with the Republican party. Likening it to the power struggle William Wallace faced in the film Braveheart, Prof Liow pointed out the personality and policy differences between them, and the significant role both parties play in resolving tension and effectiveness in policy implementation.
“The big question is, how much of a rebel is Trump, and on the other hand, will the Party be swept up by Trumpism or strengthen without fully subscribing to it?”
With most of Mr Trump’s economic policies riddled with “fundamental contradiction”, Asean is in uncharted territory, with Prof Liow suggesting that the initiative would be ceded to China and regional allies such as Singapore and Japan would have to pull their weight. With Mr Trump unlikely to possess the patience or diplomatic mien to deal with the glacial progress of Asean diplomacy, he believed that a more “transactional” diplomacy would emerge rather than a more principle-centric foreign policy.
Gateway of opportunity
Providing a closer-to-home perspective, Mr Tan, Group Director of South East Asia and Oceana Group, IE Singapore, casts the spotlight on Asean, which continues to be a beacon of light with annual growth projected to average 5.2 per cent from 2016 to 2020. He underlined the main forces that account for this in the region: a rising middle-income class, the China connection, and the integration
The reality is that while there is still much work to be done, all is not doom and gloom for the region. A younger demographic more savvy with technology and spending has seen a nascent boom in e-commerce, particularly in Myanmar, Indonesia and Vietnam.
The ambitious One Belt, One Road (OBOR) initiative by China would drive Chinese investment into regional infrastructure and goods, with Singapore’s already strong ecosystem of banks making it an alluring port-of-call. “Where China used to be seen as a market and trading partner, they now play a role as an investor,” said Mr Tan.
Together with the implementation of the Asean Economic Community (AEC), which has forged closer integration among Asean’s economies by lowering barriers to trade, and the driving force of strong fundamentals, Mr Tan believes that there is still hope and opportunity for businesses.
Keeping up with evolving Asian consumerism “Trump or no Trump, life goes on for Asian consumers.” That was the overarching message Prof Lim, Deputy Director of the Institute on Asian Consumer Insight (ACI), conveyed in the last presentation of the seminar. He shared tips on what it takes for firms to penetrate the Asian market, which studies by ACI have shown would continue to grow due to its
"The Asian consumer market will always represent an attractive destination for goods, services and investments. There is a new Asian buying confidence where consumers seek to fulfil esteem needs.”
How then do companies tap this surge in consumerism amid a despondent economic outlook? They must grasp the hard truth that markets around the world are stubbornly different, with deep-seated, value-based dissimilarities that cannot be dismissed as transient.
Using the failed ventures of Barbie in Shanghai and Kellogg’s breakfast cereal in India as examples, Prof Lim explained: “To penetrate markets, companies need to understand needs, preferences and aspirations of Asian consumers. Rather than offering standardised “global” products, you need a dedicated R&D and marketing strategy for Asian markets”.
Consumer insights is the key to seizing opportunities in the regional market.
More illuminating causes for optimism were unearthed at the panel discussion. While none of the panellists are underestimating the impact of the Trump presidency on Asean, there was a common advocacy for calm.
Mrs Fergin assured that American businesses are here to stay. “People are fixating on all the economic uncertainties that the Trump administration brings. Political temperatures may rise and fall, but business goes on for business reasons.”
Prof Delios echoed her sentiment, saying that there is zero correlation between party affiliation, constitution, and economic growth. He believed that for Asean, the influential factors lie not so much in the policies of the party and president, but the development of constraints that people of power in both political and business institutions are subjected to.
“Uncertainty only arises when the policymaking apparatus is under constraint more so than the president,” Prof Delios elaborated.
Ultimately, it is still premature for us to jump to conclusions and press the panic button. The softening of Mr Trump’s stance on previous campaign rhetoric has shown that his mandate is not the most resounding yet. All we can do as businesses looking for greener pastures is to adjust our strategies accordingly and roll with the times, keeping the beacons of growth alight.
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