Asia Shaping the World Economy
Asia is where the action is. Even if some of the tigers in Asia are getting tired, it is still where bright entrepreneurs are meeting a rainbow of opportunities and exploiting the incredible effort of the Asian family. Asia. It is not surprising. Even a bystander like me sees the crowd in the streets and the energy in the shoppers. And It's not just one country. It's the whole cluster. Statistics are one thing but boots on the ground prove the action.
In the recent ADB annual meet, ADB President Takehiko Nakao said that Asia's growth this 2016 will be about 5.7%. Much of this is due to the strong growth in India which offsets the decline in China. Yes, India is poised to grow at a rate of 7.6% in 2017. Robust growth is also seen in Myanmar, Cambodia, Vietnam and Bangladesh.
India, that tower of chaos thinly disguised as a country is showing promise of a turn around with growth forecast at 7.4% compared to 4.7% in 2013. Looks like the Modi effect is in play. And there's more for these two economies. ADB's forecast for China in 2015 is a 7.2% growth. For India, it is 7.8%. For 2016, ADB forecasts a 7% growth for China and for India, a major increase to 8.2%.
Inflation in the region seems to stay steady at 3.4% and with the oil price going down, Asia's is strengthening. Stocks, according to Bloomberg are at their highest since md-2015 showing increased confidence in the region.
Some Southeast Asian economies may be slowing a bit but it looks like Myanmar sat in some chilis and with its oil projects, growing transparency and promise of better infrastructure, the future looks bright as foreign investors have a feeling that open bidding will be the way of the future. As ASEAN countries move towards better integration, development will get a strong push. There are hurdles still to be overcome but they will do it.
Most of Asia is young and the workforce is growing. Education is much valued as seen in many young Cambodians working and studying at the same time. With training, this will bring more dividends as the countries attract more foreign investment.
World Bank jut ended its 5-year freeze on lending in Cambodia and announced a $130 million package for the country.
There is a rising middle class which powers local consumption. Where less than 6% of the population has a credit card, companies have to embrace other technologies like smart phones to pay or provide innovative ways for people to move towards the new technology.
As an example, Kudo in Indonesia has physical kiosks throughout the city of Jakarta where users can use their app and shop online. They pay cash in these kiosks. In the Philippines, budding entrepreneurs promote online and meet up with customer at a specified place to deliver the product and get payment. Not yet very efficient but the move is taking place and faster than we think.
Scale is mind boggling. Jack Ma of Alibaba just posed a challenge to the Canadian Prime Minister to sell 100,000 lobsters in one day. Where do you find 100,000 lobsters? Well Canada is just doing very well in this export.
Even Japanese companies with their lethargic boards and retarded risk genes are gaining more prominence in these markets.
If you're a business, where do you want to be? Snoozing in Europe, whining in North America, or follow the lead of Sun Life, ManuLife and AIA and roll the dice in Asia.