By Jeremy Morris, Associate Editor, US Daily Review.
PwC US today released the latest issue of its Marketmap thought leadership series, entitled, “The Southeast Asian tigers roar again: this time for real.” The Marketmap series explores how emerging markets are impacting and changing today’s global economy. This issue analyzes Southeast Asia’s progress as a rising star in the global market, led by its five fastest-growing countries: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.
“Three decades in the making, Southeast Asia’s economic, political, and market factors, combined with a landscape focused on attracting capital and development, have created an environment ripe with opportunity, but one still fraught with challenges,” said Harry Broadman, Managing Editor of Marketmap, PwC’s Chief Economist and a Leader in the Emerging Markets Practice. “It is imperative for companies to understand the array of social, political, and economic issues that might influence the labor relations and business relationships that will likely be central to investing successfully in the region.”
PwC’s report examines the factors that have driven Southeast Asian development and led to its competitive advantage. The region, home to nearly nine percent of the global population, is also home to a large and growing pool of highly skilled, low-cost workers, shaped over years of domestic and foreign capital investment. Local industries and foreign multinationals eager to capitalize on the region’s favorable labor profile have spurred growth and sophistication in manufacturing and licensing agreements.
However, the report recognizes that there are risks involved when companies choose to enter these emerging markets. The regions’ governments only recently accelerated liberalized trade and investment policies and introduced transparent regulations to combat corruption. Small businesses still tend to operate without well-structured industrial processes. Additionally, companies are faced with geographic challenges in the area, especially natural disasters, along with a culturally and geographically diverse region.
In order to evaluate, understand and mitigate these risks, the Marketmap report also focuses on the need for companies to perform pre-acquisitions due diligence when entering M&A transactions in Southeast Asia.
“With the momentum shifting toward Southeast Asia, early movers stand to reap the benefits,” said Mr. Broadman. “We believe that when approached with caution and the appropriate risk management mindset, Southeast Asia presents a strong case for multinational companies exploring strategic opportunities.”
The full issue of Marketmap is available online at http://www.pwc.com/us/en/forensic-services/publications/marketmap-southeast-asia.jhtml.