1 00:00:03,930 --> 00:00:06,780 Sean Alymer: Welcome to the Fear & Greed Business interview. I'm Sean Aylmer. 2 00:00:06,870 --> 00:00:10,050 Sean Alymer: This is an important week for Australia's trade and diplomacy. 3 00:00:10,050 --> 00:00:12,869 Sean Alymer: Right now the Prime Minister is hosting the members of 4 00:00:12,869 --> 00:00:17,549 Sean Alymer: ASEAN, the Association of Southeast Asian Nations at a special 5 00:00:17,549 --> 00:00:21,779 Sean Alymer: summit in Melbourne. It marks the 50th anniversary of Australia becoming ASEAN's 6 00:00:21,780 --> 00:00:25,230 Sean Alymer: first external partner. As the government points out, ASEAN is 7 00:00:25,230 --> 00:00:28,800 Sean Alymer: a key trading partner for Australia. In 2022, our two- 8 00:00:28,800 --> 00:00:32,730 Sean Alymer: way trade with ASEAN nations amounted to around $ 178 billion, 9 00:00:33,389 --> 00:00:35,789 Sean Alymer: greater than our two- way trade with Japan, the United 10 00:00:35,789 --> 00:00:38,370 Sean Alymer: States or the EU. I wanted to find out a 11 00:00:38,370 --> 00:00:40,620 Sean Alymer: bit more about why this meeting is so important and 12 00:00:40,620 --> 00:00:43,560 Sean Alymer: what opportunities are available for businesses looking to grow in 13 00:00:43,560 --> 00:00:47,129 Sean Alymer: the region. Asialink business is Australia's National Center for Asia 14 00:00:47,130 --> 00:00:50,458 Sean Alymer: capability hosted by the University of Melbourne with additional funding 15 00:00:50,460 --> 00:00:52,559 Sean Alymer: from the federal government. For more than a decade, the 16 00:00:52,559 --> 00:00:56,310 Sean Alymer: center has been working with Australian organizations to expand trade 17 00:00:56,310 --> 00:01:00,090 Sean Alymer: ties in Asia. Leigh Howard is the Chief Executive Officer 18 00:01:00,090 --> 00:01:02,820 Sean Alymer: of AsiaLink Business. Leigh, welcome back to Fear & Greed. 19 00:01:03,240 --> 00:01:04,080 Leigh Howard: Great to be with you. 20 00:01:04,440 --> 00:01:07,559 Sean Alymer: First, the context. What is ASEAN and why does it 21 00:01:07,559 --> 00:01:09,000 Sean Alymer: matter so much to Australia? 22 00:01:09,959 --> 00:01:13,800 Leigh Howard: Yeah, look, ASEAN, as you highlighted in your introduction, is 23 00:01:13,800 --> 00:01:18,030 Leigh Howard: the association that covers the major grouping of Southeast Asian 24 00:01:18,030 --> 00:01:22,319 Leigh Howard: nations. So people sometimes use the terms interchangeably to talk 25 00:01:22,319 --> 00:01:26,249 Leigh Howard: about Southeast Asian nations and ASEAN. But formally it is 26 00:01:26,250 --> 00:01:29,670 Leigh Howard: a bloc. It's an organization that came together in 1967 27 00:01:29,670 --> 00:01:32,700 Leigh Howard: with the founding partners, and then countries have come in 28 00:01:32,700 --> 00:01:36,330 Leigh Howard: progressively to round it out to currently 10 member states. 29 00:01:36,900 --> 00:01:38,819 Leigh Howard: So it's pretty much Southeast Asia, with the exception of 30 00:01:38,819 --> 00:01:41,369 Leigh Howard: East Timor or those are conversations going on about whether 31 00:01:41,700 --> 00:01:44,399 Leigh Howard: East Timor could be admitted to the grouping. Now, it's 32 00:01:44,400 --> 00:01:47,849 Leigh Howard: important for Australia and the world because it is the 33 00:01:47,850 --> 00:01:52,380 Leigh Howard: formal organization which nations will look to engage with to 34 00:01:52,380 --> 00:01:56,099 Leigh Howard: have discussions about regional matters on a whole range of 35 00:01:56,099 --> 00:01:59,429 Leigh Howard: topics. And these could be political, security, but of interest 36 00:01:59,520 --> 00:02:02,309 Leigh Howard: particularly is the economic. And that's a dimension which is 37 00:02:02,309 --> 00:02:05,339 Leigh Howard: worth talking about today. Because as you also said in 38 00:02:05,340 --> 00:02:09,090 Leigh Howard: your introduction, the size of the trade relationship is significant 39 00:02:09,419 --> 00:02:11,940 Leigh Howard: and really as a bloc, it's second only to China 40 00:02:12,000 --> 00:02:15,329 Leigh Howard: in terms of our goods and services trade with that region. 41 00:02:15,329 --> 00:02:19,288 Sean Alymer: So the region itself and the member, Brunei, Cambodia, Indonesia, 42 00:02:19,290 --> 00:02:23,669 Sean Alymer: Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, that makes up 43 00:02:23,669 --> 00:02:30,180 Sean Alymer: that grouping. How is that area performing economically? Massive population, 44 00:02:30,180 --> 00:02:33,780 Sean Alymer: you think of countries like Indonesia, huge populations. What about 45 00:02:33,780 --> 00:02:36,450 Sean Alymer: its broader economic growth, its growth trajectory? 46 00:02:37,169 --> 00:02:39,209 Leigh Howard: Yeah, well, that's the really dynamic part of the region 47 00:02:39,210 --> 00:02:41,038 Leigh Howard: is that it has some of the highest growth rates 48 00:02:41,038 --> 00:02:44,460 Leigh Howard: in the world. So what you've got is a combined 49 00:02:44,460 --> 00:02:48,450 Leigh Howard: population of around 680 million people. It grows pretty fast. 50 00:02:48,450 --> 00:02:50,520 Leigh Howard: It grows so fast, you almost need to check every 51 00:02:50,520 --> 00:02:53,250 Leigh Howard: time you come onto a podcast or a radio interview 52 00:02:53,280 --> 00:02:56,429 Leigh Howard: where the population's at. What's really noticeable is that for 53 00:02:56,429 --> 00:02:59,549 Leigh Howard: quite some time, it's had growth rates higher than the 54 00:02:59,549 --> 00:03:03,540 Leigh Howard: global average. So you do have increasing affluence in the 55 00:03:03,540 --> 00:03:07,320 Leigh Howard: region. And where that's playing out for exporting nations like 56 00:03:07,320 --> 00:03:10,169 Leigh Howard: Australia is that there's this emerging middle class and particularly 57 00:03:10,169 --> 00:03:15,690 Leigh Howard: consumer class that is increasingly looking for premium products and 58 00:03:15,690 --> 00:03:20,790 Leigh Howard: services. They have growing disposable income and they are looking for 59 00:03:20,790 --> 00:03:24,899 Leigh Howard: better food, better clothes, better education, better cars, better houses, 60 00:03:25,530 --> 00:03:27,780 Leigh Howard: and all of that's playing out in terms of their 61 00:03:27,780 --> 00:03:29,160 Leigh Howard: demand for global products. 62 00:03:29,610 --> 00:03:32,549 Sean Alymer: Okay. So bringing this to Australia, and you said goods 63 00:03:32,549 --> 00:03:38,250 Sean Alymer: and services, so things like agribusiness clearly, education, service, where 64 00:03:38,250 --> 00:03:40,680 Sean Alymer: are the biggest opportunities for Australian businesses? 65 00:03:41,520 --> 00:03:43,350 Leigh Howard: Yes. Well, the way I look at it is we've 66 00:03:43,350 --> 00:03:47,969 Leigh Howard: got our traditional, conventional sectors, the golden child sectors, if 67 00:03:47,969 --> 00:03:53,459 Leigh Howard: you like, of resources, food and agribusiness, and education. They 68 00:03:53,459 --> 00:03:56,220 Leigh Howard: have served us very well over a long period of 69 00:03:56,220 --> 00:03:59,670 Leigh Howard: time. Australia's got a really strong reputation globally for providing 70 00:03:59,670 --> 00:04:05,880 Leigh Howard: those commodities and services. Where the emerging opportunities increasingly are 71 00:04:05,880 --> 00:04:09,509 Leigh Howard: coming into play in Southeast Asia around the green economy, 72 00:04:09,509 --> 00:04:14,220 Leigh Howard: so Southeast Asia is also committed to decarbonizing and transitioning 73 00:04:14,220 --> 00:04:19,770 Leigh Howard: to net- zero. There's also high adoption of technology in 74 00:04:19,800 --> 00:04:23,850 Leigh Howard: the region, specifically digital. And digital, as we know, is 75 00:04:24,599 --> 00:04:28,379 Leigh Howard: pervasive across a range of sectors. So e- commerce is 76 00:04:28,379 --> 00:04:31,980 Leigh Howard: a standout, and that's something worth talking about. But then 77 00:04:31,980 --> 00:04:38,099 Leigh Howard: you've also got technology opportunities in FinTech, AgTech, HealthTech, if 78 00:04:38,099 --> 00:04:41,099 Leigh Howard: you like, and there's opportunities there. What's exciting about those 79 00:04:41,099 --> 00:04:44,670 Leigh Howard: opportunities is the way I described it is the cake is 80 00:04:44,670 --> 00:04:47,940 Leigh Howard: not yet baked. These are not sectors that are mature. 81 00:04:47,940 --> 00:04:51,450 Leigh Howard: These are not sectors that already have predominantly local ownership, 82 00:04:51,450 --> 00:04:54,570 Leigh Howard: and you'd be coming in and investing in established sectors 83 00:04:54,570 --> 00:04:57,988 Leigh Howard: or businesses. What we're talking about is growth sectors where 84 00:04:57,990 --> 00:05:01,799 Leigh Howard: there's opportunities for collaboration and partnership by Australian businesses and 85 00:05:01,799 --> 00:05:03,359 Leigh Howard: their Southeast Asian counterparts. 86 00:05:04,049 --> 00:05:05,730 Sean Alymer: Stay with me, Leigh. We'll be back in a minute. 87 00:05:12,029 --> 00:05:16,950 Sean Alymer: I'm speaking to Leigh Howard, CEO of Asialink business. It's 88 00:05:16,950 --> 00:05:20,250 Sean Alymer: interesting, if you're a nickel or lithium miner in Australia, 89 00:05:20,250 --> 00:05:23,039 Sean Alymer: you would know all about this region, particularly Indonesia, because 90 00:05:23,039 --> 00:05:28,050 Sean Alymer: Indonesia has extremely efficient operations in those areas, and it's 91 00:05:28,050 --> 00:05:30,600 Sean Alymer: hitting the price of those commodities. When you were talking 92 00:05:30,600 --> 00:05:33,660 Sean Alymer: then, you didn't mention commodities. Not to say that resources 93 00:05:33,660 --> 00:05:36,329 Sean Alymer: aren't an opportunity, but it's kind of much broader than 94 00:05:36,809 --> 00:05:41,549 Sean Alymer: perhaps what we traditionally think Australia digging it up or 95 00:05:42,059 --> 00:05:44,190 Sean Alymer: growing it. It's kind of a lot broader than that. 96 00:05:44,820 --> 00:05:48,510 Leigh Howard: Yeah, it is. I mean, one thing I should highlight 97 00:05:48,510 --> 00:05:51,300 Leigh Howard: though is that even in those sectors, so if we 98 00:05:51,300 --> 00:05:54,238 Leigh Howard: talk about resources if you like, and that will continue 99 00:05:54,240 --> 00:05:56,609 Leigh Howard: to be a good sector for Australia in the region, 100 00:05:56,880 --> 00:06:00,179 Leigh Howard: I have no doubt, but it's also highly concentrated in 101 00:06:00,180 --> 00:06:03,570 Leigh Howard: terms of the number of exporters going to Southeast Asia. 102 00:06:03,570 --> 00:06:06,690 Leigh Howard: So what was really interesting in some of the government's 103 00:06:06,690 --> 00:06:10,260 Leigh Howard: work that they did recently around developing a Southeast Asia 104 00:06:10,260 --> 00:06:14,910 Leigh Howard: economic strategy to 2040 was that they identified that despite 105 00:06:14,910 --> 00:06:17,878 Leigh Howard: there being $ 178 billion worth of trade, second- largest trading 106 00:06:17,879 --> 00:06:21,510 Leigh Howard: partner, that there's only 250 Australian exporters accounting for over 107 00:06:21,510 --> 00:06:22,979 Leigh Howard: 90% of that trade. 108 00:06:23,010 --> 00:06:23,219 Sean Alymer: Wow. 109 00:06:23,370 --> 00:06:26,580 Leigh Howard: I mean, that is just really high levels of concentration 110 00:06:26,910 --> 00:06:31,199 Leigh Howard: even within resources, agriculture and education. 111 00:06:31,920 --> 00:06:34,800 Sean Alymer: So why aren't more Australian companies exporting to these countries? 112 00:06:35,549 --> 00:06:37,619 Leigh Howard: Look, I think there's been a fair bit of work 113 00:06:37,620 --> 00:06:41,609 Leigh Howard: done on this to unpack the issues. One I would 114 00:06:41,850 --> 00:06:45,630 Leigh Howard: really strongly agree with is around awareness raising. So what 115 00:06:45,630 --> 00:06:47,580 Leigh Howard: I mean by that is not that people don't know 116 00:06:47,580 --> 00:06:51,719 Leigh Howard: that Southeast Asia exists, it's our nearest neighbor, and in 117 00:06:51,719 --> 00:06:53,400 Leigh Howard: one way or another, if you travel outside the country, 118 00:06:53,400 --> 00:06:56,070 Leigh Howard: you're either going to go through or over Southeast Asia, 119 00:06:56,430 --> 00:07:00,089 Leigh Howard: but it's awareness of the contemporary business landscape. It's awareness 120 00:07:00,089 --> 00:07:02,550 Leigh Howard: of the level of affluence, the level of sophistication, the 121 00:07:02,550 --> 00:07:06,150 Leigh Howard: level of progress, just how much the cities have developed. 122 00:07:06,480 --> 00:07:10,259 Leigh Howard: Anyone who now goes to a Southeast Asian capital city for 123 00:07:10,260 --> 00:07:13,890 Leigh Howard: the first time is often amazed by the height of 124 00:07:13,890 --> 00:07:17,970 Leigh Howard: the skyscrapers, the amount of construction and development going on. 125 00:07:18,210 --> 00:07:21,270 Leigh Howard: So I think awareness raising and giving up- to- date 126 00:07:21,750 --> 00:07:25,590 Leigh Howard: information about market opportunities is one aspect. The other one 127 00:07:25,590 --> 00:07:29,549 Leigh Howard: that I think is really important is building capability. So 128 00:07:29,549 --> 00:07:32,489 Leigh Howard: building the skills and knowledge of Australian businesses. I think 129 00:07:32,490 --> 00:07:34,530 Leigh Howard: quite a few Australian businesses aren't quite sure how to 130 00:07:34,530 --> 00:07:38,040 Leigh Howard: take their first steps into the region. We describe ASEAN 131 00:07:38,040 --> 00:07:41,459 Leigh Howard: as a bloc, but it's still 10 individual countries. They've 132 00:07:41,460 --> 00:07:46,260 Leigh Howard: got different dimensions, a concentrated city- state like Singapore versus 133 00:07:46,260 --> 00:07:50,340 Leigh Howard: a large populous nation like Indonesia of 280 million people. 134 00:07:50,340 --> 00:07:54,750 Leigh Howard: And so getting into those markets, understanding B2B relationships or 135 00:07:54,810 --> 00:07:58,590 Leigh Howard: B2C relationships, understanding what consumer preferences are in each market, 136 00:07:58,889 --> 00:08:01,110 Leigh Howard: it takes a fair bit of work, and we do 137 00:08:01,110 --> 00:08:03,119 Leigh Howard: have some work to do on that front, rolling up 138 00:08:03,120 --> 00:08:06,840 Leigh Howard: our sleeves, understanding what's required to have success in the market. 139 00:08:07,440 --> 00:08:09,570 Sean Alymer: So the government in the last week or so has 140 00:08:09,570 --> 00:08:13,560 Sean Alymer: announced deals with, I mean, maritime deal with the Philippines. 141 00:08:13,560 --> 00:08:17,610 Sean Alymer: Yesterday they announced the two- way deal with Malaysia. Is 142 00:08:17,610 --> 00:08:20,669 Sean Alymer: the government doing enough to facilitate that? Malaysia one was 143 00:08:20,670 --> 00:08:23,520 Sean Alymer: more about education. Is the government doing enough to facilitate 144 00:08:23,820 --> 00:08:27,780 Sean Alymer: relations between locals and other members of ASEAN? 145 00:08:28,500 --> 00:08:31,320 Leigh Howard: Yeah, look, I think by and large they are. I 146 00:08:31,320 --> 00:08:33,510 Leigh Howard: mean, if you talk about the traditional work of government, 147 00:08:33,900 --> 00:08:38,820 Leigh Howard: it's to put in place the frameworks to have conducive 148 00:08:38,820 --> 00:08:42,389 Leigh Howard: trading environments. So there's a raft of bilateral free trade 149 00:08:42,389 --> 00:08:47,010 Leigh Howard: agreements, and there's also multilateral free trade agreements or cooperation 150 00:08:47,010 --> 00:08:50,220 Leigh Howard: agreements that we belong to. So there's a whole range 151 00:08:50,220 --> 00:08:52,920 Leigh Howard: of tariffs and also non- tariff barriers that have been 152 00:08:52,920 --> 00:08:56,970 Leigh Howard: brought down over time. They've also invested time in developing, 153 00:08:57,059 --> 00:08:59,970 Leigh Howard: as I said, the Southeast Asia economic strategy to 2040. 154 00:09:00,360 --> 00:09:03,088 Leigh Howard: About a year ago, they appointed ex- corporate banker, Nicholas 155 00:09:03,090 --> 00:09:06,718 Leigh Howard: Moore, who was previously the CEO of Macquarie group. He's 156 00:09:06,720 --> 00:09:09,660 Leigh Howard: a very distinguished corporate figure, and he was appointed as 157 00:09:09,660 --> 00:09:12,870 Leigh Howard: a special envoy to Southeast Asia and tasked with developing 158 00:09:12,870 --> 00:09:16,739 Leigh Howard: a strategy to government for government to understand how to 159 00:09:16,740 --> 00:09:20,640 Leigh Howard: grow the relationship and specifically do more around trade and 160 00:09:20,640 --> 00:09:24,390 Leigh Howard: investment relationships to really identify practical steps that could be 161 00:09:24,390 --> 00:09:28,740 Leigh Howard: taken to help businesses come in more. And that's resulted 162 00:09:28,740 --> 00:09:32,460 Leigh Howard: in a strategy document that's got 75 recommendations, and the 163 00:09:32,460 --> 00:09:36,570 Leigh Howard: government's starting to tick these off. They announced the document, 164 00:09:36,570 --> 00:09:39,179 Leigh Howard: the strategy late last year, the ASEAN Summit in Jakarta. 165 00:09:39,540 --> 00:09:42,270 Leigh Howard: Now with this week's summit, they're announcing some more. So 166 00:09:42,600 --> 00:09:45,150 Leigh Howard: there is work being done. I'll give the government credit 167 00:09:45,150 --> 00:09:48,660 Leigh Howard: on that front. And really, we've got to help Australian 168 00:09:48,660 --> 00:09:52,469 Leigh Howard: businesses, as I say, build out relationships, identify opportunities, have 169 00:09:52,469 --> 00:09:56,070 Leigh Howard: visibility on just how compelling those opportunities are. But look, 170 00:09:56,070 --> 00:09:59,700 Leigh Howard: I put it back on business to invest in understanding 171 00:09:59,700 --> 00:10:02,759 Leigh Howard: it for themselves and evaluating whether it is the right market 172 00:10:02,760 --> 00:10:04,410 Leigh Howard: for them. It's not automatic that just because you've got 173 00:10:04,410 --> 00:10:06,569 Leigh Howard: a big market on your doorstep, it's the right one 174 00:10:06,570 --> 00:10:09,809 Leigh Howard: for you. But it is certainly worth exploring and investigating. 175 00:10:10,559 --> 00:10:13,590 Sean Alymer: And I think it was your numbers, was it 60, 000 176 00:10:13,590 --> 00:10:18,510 Sean Alymer: Australian businesses exporting, only 22% are exporting to ASEAN countries, 177 00:10:18,510 --> 00:10:18,990 Sean Alymer: is that right? 178 00:10:19,980 --> 00:10:24,000 Leigh Howard: It ranges between sort of 56, 58,000 exporters. And yes, it was 22, 179 00:10:24,120 --> 00:10:28,199 Leigh Howard: 000 exporters to Southeast Asia. So it was a proportion 180 00:10:28,289 --> 00:10:32,069 Leigh Howard: of our number of exporters. Again, it's underdone. The other 181 00:10:32,250 --> 00:10:35,820 Leigh Howard: really interesting dimension that's come out of this is that 182 00:10:36,210 --> 00:10:40,110 Leigh Howard: the level of investment by Australian companies into the region 183 00:10:40,500 --> 00:10:44,910 Leigh Howard: is very low. So our trade relationship's actually been quite 184 00:10:44,910 --> 00:10:46,708 Leigh Howard: good in terms of numbers, it's just been a bit 185 00:10:46,708 --> 00:10:49,020 Leigh Howard: static. It just hasn't been growing at the same rate 186 00:10:49,020 --> 00:10:51,660 Leigh Howard: that the region's been growing. So there is some upside 187 00:10:51,660 --> 00:10:54,990 Leigh Howard: there. But in terms of Australian investment into the region, 188 00:10:55,710 --> 00:11:00,420 Leigh Howard: it's just around 3% or so of our total investment 189 00:11:00,420 --> 00:11:03,179 Leigh Howard: globally. So here we've got a region, it's our second- 190 00:11:03,179 --> 00:11:05,578 Leigh Howard: largest trading partner, but for some reason we've only got 191 00:11:05,580 --> 00:11:08,429 Leigh Howard: 3% of Australia's of outbound investment going in. When we 192 00:11:08,429 --> 00:11:13,319 Leigh Howard: say outbound investment, that's everything from funds, institutional investors, but 193 00:11:13,320 --> 00:11:17,070 Leigh Howard: also boots on the ground, local offices of Australian companies, 194 00:11:17,130 --> 00:11:20,610 Leigh Howard: operations in market. And I think that speaks also to 195 00:11:20,610 --> 00:11:23,670 Leigh Howard: the hesitancy about how to enter these markets, how to 196 00:11:23,670 --> 00:11:26,640 Leigh Howard: do business in there, to have the confidence and the risk 197 00:11:26,640 --> 00:11:30,780 Leigh Howard: appetite to set up business there and really take advantage 198 00:11:30,780 --> 00:11:31,468 Leigh Howard: of what's on offer. 199 00:11:32,099 --> 00:11:34,170 Sean Alymer: We're out of time, but quickly, what do you hope 200 00:11:34,290 --> 00:11:38,609 Sean Alymer: these few days with the ASEAN Summit in Melbourne will achieve? 201 00:11:39,660 --> 00:11:42,059 Leigh Howard: Look, I hope it's a really good installment in deepening 202 00:11:42,059 --> 00:11:44,939 Leigh Howard: the partnership with the region. I hope it creates visibility 203 00:11:44,940 --> 00:11:47,610 Leigh Howard: for Australian businesses that may not have Southeast Asia on 204 00:11:47,610 --> 00:11:49,920 Leigh Howard: their radar. I hope it gets them to start taking 205 00:11:49,920 --> 00:11:53,250 Leigh Howard: those first steps in terms of investigating the market, putting 206 00:11:53,250 --> 00:11:55,919 Leigh Howard: it on their agenda, if you like, and doing their 207 00:11:55,920 --> 00:11:57,870 Leigh Howard: homework around seeing if it's the right market for them. 208 00:11:58,650 --> 00:12:00,449 Sean Alymer: Leigh, thank you for talking to Fear & Greed. 209 00:12:00,840 --> 00:12:01,228 Leigh Howard: Thank you. 210 00:12:01,679 --> 00:12:04,770 Sean Alymer: That was Leigh Howard, Chief Executive Officer of Asialink Business. 211 00:12:04,770 --> 00:12:07,320 Sean Alymer: This is the Fear & Greed Business Interview. Join us every 212 00:12:07,320 --> 00:12:09,960 Sean Alymer: morning for the full episode of Fear & Greed, Australia's best 213 00:12:09,960 --> 00:12:12,600 Sean Alymer: business podcast. I'm Sean Aylmer. Enjoy your day.