I read with interest, an article published a couple of weeks ago in The Vancouver Sun: two leading Canadian economists had called for Canadian businesses to expand abroad. What particularly caught my interest was, among the 10 Asian countries for expansion on “Canada’s Next Top Markets” list, half were in Southeast Asia (SEA). And five of the Asean Big Six comprise Indonesia, Malaysia, Singapore, Thailand and Vietnam.
This ‘Look (Far) East’ policy isn’t exactly new among Western countries. Southeast Asia has seen a surge in recognition by superpower and rising economies, with prime ministers from Britain, Canada, China, India and Japan – to name a few – have come a-courting.
The growing interest is understandable: Asean remains one of the most rapidly growing regions of the global economy, due to its overall competitiveness as a low cost manufacturing hub and its fast growing domestic consumer markets. The increase in mid-income households, inter-Asian trade and manufacturing supply chains with Northeast Asia and expansion in infrastructural spend and urban development also play an important role in elevating the Asean economy as a whole. Once Asean becomes a single economic bloc in 2015, accessibility to one market means you gain access to others within Asean.
I am undeniably a strong advocate of Canada’s expansion in the Asean region and was glad that the Harper administration had signed a joint declaration of cooperation with Asean under the Global Commerce Strategy. In fact, as testimony to our commitment to the region, we set up office in Malaysia three years ago, subsequently opening in Singapore and Hong Kong (headquarters still remains in Vancouver).
But growth is a two-way street: Asean stands to benefit by doing business with Canada and the rest of the developed world, too. For the very reason that different product offerings and skills, and the sharing of knowledge can help diversify economies, better equip human capital, increase productivity and, hopefully, translate to more equitable living in the global society.
Canada is, for me, a country other economies from the East can leverage on. Canada ranks as one of the top countries in GDP among the G7, no doubt propelled by its sound financial, banking and political systems and the oil boom. Alberta, a province in Southwest Canada, has the third largest proven oil reserve in the world, after Saudi Arabia and Venezuela. Canada has now joined the ranks of exporting oil nations, and is reported to supply more petroleum to the US than Mexico or Saudi Arabia. Realising the potential in this North American country, China, Japan, Kuwait, Malaysia and recently India, have acquired stakes in the Canadian energy sector.
This means an increase in job creation, particularly in cities like Calgary and Edmonton and neighbouring satellite cities. Job creation equals migration and translates to a surging demand in rental housing.
More and more Asians, who traditionally invest in brick and mortar, are beginning to see the wisdom in investing in property in these areas. Of course, it takes time to educate a global public that has constantly equated Canada with Vancouver — which is completely understandable because Vancouver is an amazing place! That said, the economic fundamentals in Alberta, plus the exemption of inheritance taxes and the absence of restriction on the trading of Canadian property for foreigners positions Canada as a far more viable property investment option than countries in, say, Singapore, Hong Kong and Malaysia which are already experiencing tightening in housing regulations; or America or Europe, which are still recovering from both the subprime crisis and the Eurozone downturn. Basically, what I’m saying is, it is prudent to invest where there is money to be made.
But. Back to the courting of Asean by superpower economies. I hear that US President Barrack Obama is visiting several countries in Asean come April – ah, exciting times indeed!