ASEAN summit and Obama in Myanmar: An analysis of the current political landscape

The ASEAN summit in Phnom Penh had two important tasks: Human rights and the situation in the South China Sea. Cambodia as the host failed two times: The human rights declaration is far from what is needed and isn't helping activists at all. It basically writes down the status quo for most countries in ASEAN, where torture, unjustice and a weak legal system is still the standard. No wonder that Cambodia, having a long rap sheet in human rights, wasn't pushing for more.

More important for the strategic role of South-East Asia is of course the South China Sea with it's natural ressources. China basically claims the whole area as it's own territory, while the Philippines and Vietnam disagree. But China has it's own way of diplomacy: It won't talk to all, instead it insists in bilateral talks. It tries to outplay the ASEAN countries, and the the way it does it is with pressure and money. That works very well for Cambodia, the ASEAN chair, whose dictator Hun Sen is after the death of former King Sihanouk even closer with his friends in Bejing.

So the Cambodia government failed also with this issue. Instead of bringing the ASEAN countries closer together and unite them, it's role was to support the separation managed by China.

But something else happend: Although President Barack Obama came to the summit for the second time, he made a stop in Myanmar before for the first time. Actually he was the first US-President ever to visit the country. Why he came? To set a statement, mainly to China. It says "We are here and we take the competition".

The US knows that the importance of the middle-east is fading. Recent research showed that the US can be independet from Arab oil in a decade. The Palestin-Israel conflict is annoying and doesn't come to any solution. The new markets and big players are in Asia. That's why Obama is looking for allies, trying to strenght assisting ties and reviving old relations.

He can count on the Philippines, a long standing partner. Malaysia, Indonesia and Brunei are muslim countries, but moderate, and they don't like China at all. For them, it is Asia first, but second maybe America more than China. Vietnam had already issues with China, and the South China Sea conflict doesn't make it better. They agreed recently to accept military support from the US.

Thailand is trying to be polite and neutral. At least this is what the government does. Laos is already becoming a Chinese puppet, and so is Cambodia. But both are the poorest and least important countries.

Beside the governments, there are the people. Obama mentioned in his speech in Yangon that the most important and difficult job is not being president, but a citizen. Al his remarks about freedom and dignity and respect was targeting the common people.

What America always did very successfully was selling a life style. And it works pretty good. You won't see people standing on the street with signs "I love Hu Jintao" or "We love Wen Jiabao" (unless they are forced to). You won't see local activists demanding the Chinese premier to help them in environmental or human rights issues. But they do it when Obama comes. And they do it because he sells hope and the American way of life. This is what the people want.

Of course, reality in term of human rights isn't anymore what it was in the US. They just renamed "polical prisoners" to "terrorists" and all of a sudden everything is fine. They did not limit the freedom of speeach but instead installed the Patriot Act. The US is becoming more and more repressive, basically for the same reason regimes always become: The ruling relite doesn't want to share it's privilegies with too many others.

But still people trust America more than China. And Myanmar plays an important role. It's government is begging the west for more engagement, because they know if China wins, the old guys will come back and all the efforts for opening and more freedom will be set back.

The common people already made a decision: Their own country first, ASEAN next. But when it comes to a lifestyle, then it is the western way of living. Not just in terms of consumer goods (and safety of products), but also in freedom of speech and human rights.

Again Asia will the stage for the competiton of ideas. Let's just hope this time it will remain a competition and not becoming a fight again.

What makes a good business environment?

It seems there is a lack of knowledge in some Asian countries about what needs to be done to attract and keep investors. The "keep" part is the most important, since emerging economies always attract in the beginning a type of businesses who are looking for a fast and short term opportunity (and profit). They jump into the market, get the profit and move forward.
For a sustainable development there are some key factors.

1. Transparent laws
Laws need to be enforced equally for everyone. If a law is only applied to a certain type of businesses or a certain group of people, it will be considered unfair and a major obstacle for attracting investments.

2. Tax reduction, not increase
If you want attract businesses and investors, the tax issue is probably the biggest. Companies don't like taxes while governments rely on them as their main income. So there needs to be a balance, but in early economic development stages it is recommended to keep taxes for companies as low as possible.

3. Zero corruption
There is still no proof that corruption does anything good to a economy. It needs to be cleared in all levels of governance and businesses. That also leads then to

4. Market rules
If there is no justice for businesses, they will be scared away. In case of business disputes there needs to be a transparent judicial system to oversee them, based on laws.

5. First come, first serve leads the wrong way
It is not true (if ever told) that the first investor is the best because he is bringing money for sure. As we see in many cases in south east Asia, it is often wrong - they fail in the planning stage. So governments should be carefully analyzing investment proposal for the long term impact for the economy as well as for environment and social impacts.

Career development in Laos (and other countries)

I was at the Vientiane Career Fair recently (listen to my Interview with the organizers here) and it was quite amazing how many people showed up (400 in the first two hours). According to the Vientiane Times most students were looking for an job in accounting. Why that? I think, and some experts in this field told me so as well, that most students have no idea what a job is and means. Accounting sounds like a well paid office job, and this is why so many want to work in this field.

Now here comes something in play my friend Titi mentioned at the recent Laos Business Meetings in her talk about career pathways. Indeed people do not know what companies require, what a career pathway actually is. Students are just not prepared for the business life. They have certificates, but no clue about what is actua happing in the company they applying for a job. She is looking for ways to change this.

Nearly all foreigners were complaining about the lack of professional skills within the young Lao community. This is true, but I also think that this is quite natural since most people are between 20-25 and have of course not much of an experience. While someone mentioned the need of a education were also internships and trainings are supported as well as craftsmanship (like German system, where you are an apprentice for 2 years with school added), what many people do now is job hopping for getting experience.

So how to solve the problem? I think there is still a need for a major change in (public) education, with a radical change in curriculums. Also, there must be a closer relationship between universities and the business community, so the first can be aware of what the latter actually needs. It might be helpful to use the summer break for mandatory internships (I know internships are already required, but what I learned was that they are over-regulated. Just let the people work in a company for a month). Oh and as long as Manadarin is not taking over yet, more important than using Excel is speaking English. It IS the business language, period.

I really like the idea of the Khan Academy, where you learn online (at home) on your own pace and the classroom becomes the place to reflect and discuss what you learned (formally know as homework). There are also TED talks, so no excuse of "we do not have the materials".

And don't even think the above is a Lao problem or in any way linked to "Lao culture". Vietnam, Thailand and Cambodia have exactly the same issues, and I guess it might even similar in Malaysia, Myanmar and Indonesia.

What is your idea?

Maybe a new podcast from Asia

Just hear what I recorded today (a new coffee shop in town and another idea)

The intro is from The Cells, a popular band in Laos..

Cross cultural issues

Some things I found quite interesting about this topic: In Laos people eat noodle for breakfast, in Germany bread or cereals. Both will ever change this habit. (Thanks to Gunnar Lindh for this!)

German people have the wedding ring in the right hand, will most other countries have on the left hand.

In Laos people always ask you where you coming from (or where have you been - Jao pai sai maa). This is not just pure curiosity. In former times, before big cities were established, every traveller was also provider of news. So it was always interesting to know where they come from and then ask for news. By the way, How is it going or the GEran "Wie geht es" is close to it as well.

Nutrition databases and Asian food

I am on a diet again, and I really like to monitor what I ear with a application named Nutrimanager. It counts calories, weight, protein intake, fat, etc. It also has a database with a lot of dishes. The reason why I used it was that it measures in Gramm and litres since most apps use lbs and oz. But the real struggle I had with this program and have with another one for my android phone is, that it does not cover Asian food at all, and of course only a few Asian dishes. While all fast food meals like Chucken McNuggets are present, it lacks of Fish Amok, Chicken laab or Banh Xeo.

So I am thinking right now about a Asian food database, with nutrition in formation. the most common dishes from countries like Burma, Thailand, Laos, Cambodia, Vietnam, Malaysia and Indonesia.

Anyone knows if these databases are already there?

Doing business in Asia

Today I found this in my inbox. A brief description of someone wanted to do business in Asia. It doesn't even matter what country this is about:

I have applied for an investment license at the One Stop Unit in March
2009. I have still got no answer. The process is lengthy, complicated
and completely in-transparent. In reality, investors buy themselves to their licenses. I didn't pay, so I didn't get the license.

After all I have given up to make business here. If you are not
ruthless, you will only burn your fingers.

As someone who believe that business is driving development, this story shows the real problem of developing countries: It's not so much poverty or lack of education (though this is a huge problem, but not the cause). It is a lack of desire from governments. Desire in developing the country. Most governments in SE Asia are just fine with the situation, since their members already made enough money for themselves.

Let's see a developing country as a start-up business. The way they do it now is the way start up operated in the time of the first internet bubble. VC (in our example NGO and IMF and Worldbank) gave money, they burned it and asked for more money. Because there was a steady stream of new money coming in, there was no real reason to focus in the business model. That's the way developing countries operate: The infrastructure of the country is not financed by income from operations like taxes, but from donations and support from international institutions. The lack of taxes used to run the country is caused by a) lack of tax collecting processes and b) corruption.
So why aren't countries collecting taxes? Actually they do, but the system is far from transparent. First of all, foreign companies are due to tax, always. Local family businesses have to pay tax as well, but seldom do. The reason is: They won't get caught, and tax officers always think its too much work for them to collect the few dollars from small businesses. Then of course is a total lack of infrastructure and understandable tax laws. The reason is simply again the missing desire. If you want to get tax, you will establish a system.

The main reason why there is no system is corruption. This is all over Asia, and it's the biggest obstacle for the developing countries. Corruption kills competition and kills development of markets. Only the wealthy elite can afford to pay the bribes, so they run moist of the businesses and get a de facto monopoly. Without competition there is no incentive to grow and improve, so most businesses aren't developing much. Just look at state owned Hotels in Asia, or the quality of local run companies in general. Most use quite old equipment, producing same products since 10 years.

Why its important to have foreign companies?
Because they drive markets faster on a higher level. The know the process of competition and they know also they have to work harder then local companies (not only because of corruption, but also because cultural differences, lack of networks in the country a.s.o.) Successful foreign owned companies are a challenge for local companies, so the they have a quite good reason to improve and get the business.

But as long as the desire of the people in charge is their own bank account and not the countries wealth, there is no change at all.