AEC - 2015 & beyond

with DBAV Executive Director, Hyunju Park (middle) and DBAV Chairman, Remco Gaanderse

with fellow-panelists in the dialogue with the audience

ASEAN leaders adopted the ASEAN Economic Blueprint in 2007 to be the masterplan for the establishment of the ASEAN Economic Community (AEC) by 31 December 2015 and eventually a full-fledged ASEAN Community by 2020.

Recently, the Dutch Business Association Vietnam (DBAV) organized a luncheon talk, under the name "ASEAN Economic Community - 2015 & beyond" in Ho Chi Minh City. 

In my 45-minute talk, I outlined both the achievements thusfar and the challenges still ahead. Although the ASEAN-6 states (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) have managed to make significant progress on import tariff eliminations and the easing of foreign investment regulations, the other member states (Cambodia, Laos, Myanmar and Vietnam) are lagging behind and need till at least 2018.

Intra-ASEAN trade stands at around 25% and cross-border M&As at around 9%, with Malaysia, Singapore and Thailand as frontrunners. This relatively low figure (which, off course, excludes major investors (and non-ASEAN states) China and Japan), however, will rise, due to the fact that, in particular, the cross-border investments into Myanmar have risen dramatically in 2014 and will continue to do so in 2015. 

Sceptics have pointed out that economic disparison between member states will prove to be a major hurdle in realising a true AEC. But even within the EU, there is still a large economic divide between the Nordic countries and Eastern Europe member states and the fact that a powerful economy like Germany plays a leading role in the Union (as Singapore, Malaysia and Thailand do in ASEAN), is not necessariy a bad thing. While ASEAN multinationals have been engaged in cross-border investments for quite some time, the AEC will, in particular, open doors for SMEs of, for example, tech-savy young Vietnamese and Indonesians to take on cross-border adventures.

Is 31 December 2015 a deadline ? No, it is rather a milestone in the work in progress, which is called "ASEAN Community". 

Read DBAV's comment

This article appeared earlier in e-magazine Business Trends Asia 

China cross-culturally aware

Sheriff Aligbeh of Clever Culture Communication at Addax in Geneva

Coca Cola, Disney, and more recently, Starbucks……, over the years, Western marketeers have successfully  “sold” lifestyle concepts around the world. Curiosity coupled with creativity have layed the foundation for the penetration of new markets and the establishment of true global brands.

Only recently, Asian brands have begun to conquer the world. After earlier Japanese and Korean successes in the automotive and electronics sectors, now a broader range of consumer goods from Asia are entering Western markets. 

Over the past decades, outward looking Western marketeers have researched consumer behaviour and trends in other parts of the world. In the  Sixities of last Century, Dutch social psychologist, Geert Hofstede, developed a cross-cultural theory covering cultural values and behaviour in various regions and nations. Although, these so-called “dimensions” may be quite stereotyping and outdated nowadays, they did mark the beginning of trying to understand what drives the different peoples around the world and are embraced by the Western business community to this day.

However, the world is changing. Cultures are not static, but are constantly evolving, in the past 50 years even more rapidly than ever before, being influenced by urbanisation, economic development, technology and globalisation. People’s behaviour and even the values driving this behaviour are changing as years and generations go by.

Asian investors are beginning to understand that it takes more than just money to run viable businesses elsewhere and that some investments abroad may turn out to be a failure. In the West, we have learned to deal with financial setbacks and divestments the hard way. 

Chinese oil giant, Sinopec, in 2009 acquired Swiss-based Addax Petroleum. Both Addax’s Chinese and Swiss executives are obliged to enroll in cross-cultural training programs on Africa, one of the company’s core regions. As part of this cultural awareness initiative roll-out, Sheriff Aligbeh, Nigerian-born, Netherlands-based cross-cultural consultant and founder of Clever Culture Communication, is regularly in Geneva to conduct training programs on African cultures for Addax. Clever Culture Communication creates and delivers tailor-made cross-cultural (business) solutions to corporate and public sector organizations operating in the Sub-Saharan African region. 

"There seems to be a clear will to invest in educating employees on African cultures, but also other value systems, in order to encourage dialogue and an open approach to differences", says Aligbeh.

Last year, affiliate of the Royal Tropical Institute in The Netherlands, KIT Intercultural Professionals, opened an office in Shanghai. Within one year of operation, in which it served multinationals active in China, its Chinese daughter company will now run cross-cultural training programs for Chinese clients for the first time. Chinese companies with overseas investments and universities with exchange programs in, for example, the U.S., recognise the need to prepare their managers and students for their business dealings and social life abroad. 

 

Shanghai-based Wendong Deng (far right) is heading KIT Intercultural Professional's China operations. Also pictured (from left to right): Jolande Zeeman, Senior Trainer, KIT Intercultural Professionals and Heleen Agterhuis,  Managing Director, KIT Intercultural Professionals
This article appeared earlier in e-magazine Business Trends Asia