In Southeast Asia, What’s The Importance of Policy/Political Briefings to a CEO?
By N Mark Castro
Let’s admit it: there’s much uncertainty on Foreign-Direct Investments (FDIs) across major emerging markets in Southeast Asia.
Thailand is currently under Martial Law with no clear indication as to its end yet may impact even Burma’s oil and gas sector. The only good thing is that coups are so common in Thailand it’s become a norm that the market can withstand.
Despite the ongoing political crisis in the Philippines, US investors are still keen on expanding its interest there. U.S. Commerce Secretary Penny Pritzker’s recent visit to Manila indicated its strong faith in the market as she was accompanied by energy and mining giants Chevron and Rio Tinto, as well as insurer ACE Ltd., and Risk Management Consultant Marsh & McLennan.
Indonesia is set to elect a new president in a few weeks and, despite the continuing stumble of the rupiah against the dollar, all major industries are on a wait-and-see attitude as to who will emerge as the elected leader of the largest economy in Southeast Asia.
You might ask what does politics have to do with business and that’s a fair question, but in Southeast Asia, it’s everything to do with business.
Economic policies all the way to ministerial decrees are crafted at times on short-sighted and populist solutions that impact long term market conditions. It is also not surprising that even presidents enact conflicting directives.
Imagine if you’ve invested heavily on conservation campaign as part of your CSR (Corporate Social Responsibility) initiative. Your PR | Marketing department recommended it, sales are happy about it, research showed it would be welcomed by your stakeholders, and even finance knew it’s needed, and your board is happy that you’re doing what’s right as a corporate citizen.
You’ve invested on the infrastructure, the funding, the manpower, and even touted it to the press.
But since you lacked a sustainable plan that covers political trends that impact your bottom-line, you end up with this mess.
You can’t blame your PR | Marketing department because they’re busy promoting your brand. Research only covers what your competitors do. Sales are just busy selling your products. In other words, you just stepped in one of Southeast Asia’s unique business environment — politics.
As a CEO | President in Southeast Asia, you must be equipped with all news coming in from different departments. You can’t afford to extend the reach of your department even if you want to cut cost. For instance, as your PR | Marketing team deals with media relations, they’d be stretching themselves dealing with ministries, agencies, or lobbyists, especially in a field where they could be eaten alive.
1. Hire a Corporate Political Adviser – even banks nowadays engage government liaisons to discuss policies. Professional service industries are often wired to the latest political news so they can align their advocacy or adjust if necessary. Think of lawyers, doctors, and even engineers operating in Southeast Asia, especially with the advent of ASEAN integration.
2. Be with the news not ON the news – unless you’re promoting your brand, you wouldn’t want to be the scapegoat that local politicians are hungry for to serve as public fodder. Know whichever media are operating in the country you’re in. For instance, majority of the media in Southeast Asia are owned by people with deep political interests. In Indonesia, TV wars have already outed their political inclinations. A quick look at the ownership will also reveal their political memberships. Not affiliations, memberships. In the Philippines, the biggest political party is ABS-CBN TV station, having produced several senators and a vice-president. So next time you switch on that TV, be sure to know which side you’re listening.
3. In Southeast Asia, it’s never the same as the West – some investors have left the region disappointed with how things have turned out. Horror stories in Vietnam abound how easy it was for business to be shut down because of a mere slight. Even insurance giant Manulife was declared bankrupt by the Indonesian courts simply because of technicality.
The first rule when you land in Southeast Asia where you’re greeted by your own driver and your wife at home is treated royally by the household help is — forget what you know in business school. Southeast Asia promises to be one of the most thrilling business experiences you’ll ever have, but it’s all about the relationships you foster along the way. Even a security guard can open the doors for you straight to the company CEO from whom you couldn’t get an audience through proper channels.
So while you may have your ducks in a proverbial row, ask yourself: who’s briefing you on what’s really happening now?
Posted on July 1, 2014, in General, Politics and tagged asean integration, ceo in southeast asia, how to do business in southeast asia, southeast asian business. Bookmark the permalink. Leave a comment.