Of smoky Asian tigers and 1000 year old ducklings
“Arriving in Singapore is always a breeze, as your suitcase arrives even before you have. But immediately after stepping outside the terminal, the welcoming breeze turned very unpleasant, as the side-effects of the massive forest fires in Indonesia hit me straight in the face.”
However, as a late arrival checking into my hotel, I was lucky and received an 'upgrade'. So, instead of the usual room with internal views of the hotel lobby, I had a room with a great view of the Marina Bay Casino Towers! Or so, I thought. But the smog of the Indonesian forest fires was super thick – and did not diminish for the rest of my stay!
A blog by Jeroen Plag, head of Client Coverage Americas, Asia & UK, ING, on a business trip in Asia
Both Malaysia and Singapore have protested and offered to help Indonesia, but to no avail – the PSI (Pollution Standard Index), was well over 300, which prompted some schools to close. On the Indonesian island of Kalimantan, where farmers clear their grounds in order to plant new palm trees or other crops every year, the PSI even reached 1600! Compared to the Netherlands, depending on the number of diesel cars in your neighbourhood, the average PSI will be around 100. Indonesia is trying to address these fires, which occur every year, but with limited success. And due to the expected course of El Ninjo, experts fear that the situation will last for another month.
Some international corporates we met with in Singapore expressed their concerns on the progress of the Indonesian government in attracting foreign investments. Regulations have increased, including the requirement to learn Bahasa depending on the level of employment. On the western border, the Malaysian prime minister is entangled in multi-billion foreign funds embezzlement allegations. Add to that the expected US Fed interest rates moves and corresponding weakness in emerging market currencies, and the economic picture is definitely becoming less rosy for these countries.
Next stop: the Philippines
While the Philippine peso has also been weakening, the mood in Manila was decidedly more cheerful. This obviously was also fed by the 25-year celebrations of the ING branch two weeks ago! With more and more European companies looking at increasing investments, across for example infrastructure, renewable energy, transportation as well as retail, opportunities are plenty. I last visited Manila five years ago, and the changes are obvious. For example, the Bonifacio area around the US cemetery was green then. Now, 24/7, construction companies are adding two floors a week to sprawling skyscrapers in this area. American style malls cater for the growing middle class consumption needs, including lavish Ferrari and Aston Martin outlets!
I also visited the ING GSO (Global Services and Operations) in Bonifacio, where various back office processes are executed by, on average, 26-year old local staff. Because of the high education levels and as well as excellent English skills, the Philippines is moving from a business process to a knowledge process organisation environment. More and more international (financial) companies are outsourcing value added processes - one American bank reportedly employ 12,000 staff locally.
The Phillipines was the most promising Asian country after WW II, but was quickly surpassed by Japan, Taiwan and Korea in the north and Singapore to the south. With over 100 million people, abundant natural resources, an average age of 23 years young, USD3,000 GDP per head and growth of 6% annually, the country now seems destined to make up for lost time. Next year's presidential elections are crucial in order to continue that progress. Ample infrastructure challenges demand foreign knowledge and investments as well as a transparent investment climate. In a country where 60% of the population is dissatisfied with political progress and therefore happy to sell his or her vote for as little as USD40, the challenges for the next president are clear.
When in Rome, eat pizza, in Mexico insects, so in Manila I was invited to try the local delicacies as well. Having lived in Korea, I was prepared for fermented food, like kimchi. However, the Philippine fermented version of the 1000-year old egg, which turns black, is actually a duck egg - with the duckling embryo still inside. Called ‘Balut’, it is definitely a local delicacy which I promised to eat during my next trip to Manila, five years from now…!
Follow Jeroen on Twitter: @JeroenPlag