In this article, Devonshire-Ellis, details, by country, what he has learned during 2017, and what 2018 may bring in terms of opportunities

Singapore

Singapore has quietly been embracing new digital technologies; transforming its massive logistics and port infrastructure and all the industries that support that transformation. Efficiency, not size, is the key word here, something Chinese developers may care to note. The city remains at the forefront of ease of doing business rankings, and, as noted above, is now moving well ahead of Hong Kong in competitiveness and infrastructure. Our billing into Singapore rose by 30 percent in 2017, and we are expecting the upward FDI trend to continue as international businesses from Europe, North America, and Australasia utilize the city as a regional hub for ASEAN, Indian, and Chinese trade and investment.

Cambodia, Laos, and Myanmar

Of these, Myanmar is perhaps the most enigmatic though its human capital ranking is dreadful, with little talent to recruit. It remains largely a self-sufficient agricultural based population with entire towns and villages raising smallholding crops for basic survival. It remains the preserve of big ticket investors or rock and roll cross border traders in Chinese and Indian goods, and can be expected to remain like this for at least another decade. Laos has similar issues, is mountainous and landlocked. Cambodia is perhaps more interesting from the FDI perspective, and remains a viable alternative to Vietnam, with its cheaper wages. But this is offset against poor infrastructure. While the investment field is changing, these countries are not for first time investors into Asia

Indonesia

The country is booming, and has plenty of infrastructure opportunities. Jakarta is suffering from the typical Asian boom – not enough infrastructure to cope – but this will change over time. Ports and transport infrastructure development are all being put in place, and local manufacturers have finally got over the China hangover of the China-ASEAN Free Trade Agreement, and are starting to compete across South-East Asia. Ports such as Surabaya are attractive for Australia trade. Dezan Shira & Associates will be funding a specific Jakarta office development in 2018; staff are already on the ground and we see FDI requirements already walking through the door. It’s a huge country, still opening up, and not without its frustrations, but Indonesia will be an FDI star for the next five to ten years.

Malaysia

Malaysia is quietly doing its thing, and has been active in courting Chinese investment. Links between the country and Thailand are improving, giving hope that the much-vaunted China-Singapore high speed train service may yet come into play. The country has several free trade and special economic areas serving Chinese investments, the only potential criticism is that the incentives for them do not always extend to non-Chinese investors. Otherwise, steady as she goes.

Philippines

The Philippines, too, is experiencing something of a boom, albeit with the typical Asian city demands being placed on creaking infrastructure. That is changing though, and development is expanding out from Manila and into increasingly attractive suburbs. Manila’s gaming industry has proved a bit hit with gamblers from mainland China and the rest of ASEAN, while improvements in the overall FDI environment for foreign investors are also being subjected to opening up and reform. As Chinese labor becomes expensive, the Philippines is fast becoming a regional outsourcing hub.

Thailand

The military coup saw FDI tail off in Thailand, but a much needed political and economic stability has been injected into the country as it goes through another of its periodic ‘cooling off’ decades. It’s now a good time to invest in Thailand as tempers cool, and the country gets back to the business of being an Asian Tiger economy rather than a politically argumentative battleground between left and right. Steady as she goes.

Vietnam

Vietnam has secured its position as a serious manufacturing rival to China, and has been booming. Foreign investment has been pouring into cities such as Ho Chi Minh, with an influx of expatriates finding the mix between Vietnamese work ethics and nearby beaches too good to miss. Hanoi to the north attracts service investments and businesses connecting with China and Yunnan Province, but HCMC remains the FDI star. Infrastructure and productivity continue to improve, and the country has demonstrated that it is able to take on China and compete.

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