Business and Trade Relations between Scotland and ASEAN

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Podcast Description

We are joined by Gavin Wilkins, the Chief Commercial Officer (CCO) of Hawksford, a leading international provider of Corporate, Private Client and Fund services, to discuss ‘Business and trade relations between Scotland and ASEAN’. 

Gavin brings over 20 years of experience in finance, specialising in international capital management, fund services and alternative assets among much else. He has worked and travelled widely across Asia and is a committee member of the British Malaysian side. 

In this podcast we will be discussing the ASEAN region, home to the world’s fastest growing economies, and specifically what Scottish companies and investors can do to help access these markets and how it can help. 

Topics discussed:

  • Singapore as a centre of international trade
  • The economic landscape for ASEAN, how it compares globally and how much it impacts the UK
  • Opportunities for Scottish entrepreneurs and businesses in ASEAN and the markets to explore 
  • Key lessons about how companies can set up and operate their businesses within Singapore

Transcript

00:00:00:00 – 00:00:32:08
Sean Paterson
Good afternoon. Welcome back to the Asia Scotland Institute podcast. Today, we are delighted to be joined by Gavin Wilkins, the Chief Commercial Officer of Hawksford, a leading international provider of corporate trust fund administration services. Gavin brings over 20 years experience in finance, specialising in international capital management, fund services and alternative assets, among much else. He’s worked and traveled widely across APAC and is a committee member of the British Malaysian society.

Today, we’ll be discussing the ASEAN region, home to the world’s fastest growing economies, and specifically what Scottish companies, investors can do to help access these markets and how it can help. Gavin, thanks for coming on.

00:00:32:10 – 00:00:34:23
Gavin Wilkins
Sean, Thank you. Thank you for having me.

00:00:35:00 – 00:00:42:06
Sean Paterson
Brilliant. So what does the economic landscape for ASEAN look like right now? How does this compare globally and how much it impact the UK?

00:00:42:11 – 00:03:53:19
Gavin Wilkins
Sure. Well, the Association of Southeast Asian Nations is a collective of ten member states in Southeast Asia. So we’ve got Brunei, Cambodia, Indonesia, Lao, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam in there. And that all equates to a combined GDP of approximately 3.6 billion U.S. dollars and a population of 660 million people. So it’s is clearly a big market.

Actually, it’s the third largest economy in Asia and the fifth largest globally, which many people don’t realise after the US, China, Japan and Germany. In terms of growth, it’s projected to grow at around four and a half percent this year, according to the the IMF. ASEAN actually contributes to 10% of global growth. So very important on a on a macro stage, the region itself is currently pushing for digital transformation of private investment in digital infrastructure development.

So 5G networks, cloud computing, cyber security, AI and smart manufacturing. And earlier this month, ASEAN launched negotiations for an ASEAN Digital Economy Framework agreement, which is touted to be the first major region wide digital economy agreement in the world. So big news if we’re homing in a bit more on ASEAN UK economic ties, the latest UK government data shows total trade in goods and services between the UK and ASEAN Member States is standing around 46 and a half billion for 2022 and going the other way for UK inward FDI from ASEAN.

It’s it’s around about 15 billion. That data was was back to 2021. But it’s the latest I’ve seen and against all of that we’ve actually got loads going on. In July 2023, the UK announced a new £25 million ASEAN UK economic integration program and that’s aimed at supporting ASEAN economic integration and drive stronger, more equitable growth through better regulation, improved systems for trade and wider access to financial services.

So good news if you’re working in those sectors and and even more recently than that, the UK government has signed a new strategic partnership with Singapore to help grow the UK’s economy and enhance shared security. Singapore actually is one of the UK’s closest and most dynamic partners in the ASEAN region, this 21 billion of trade relationships and that is 40% of UK total trade with East Asia.

Singapore entities have a total of 226 billion invested in the UK. So but that agreement really will harness the UK and Singapore’s expertise in new technologies like cyber and AI to create air, to create jobs. And in both of our countries. And following on from all of that and a pause for breath in a moment about that strategic partnership, the UK and Singapore are going to work to conclude a new and modern bilateral investment treaty, which should be the first that the UK has negotiated since we left the EU.

So lots going on, big market or good news and opportunity?

00:03:53:19 – 00:04:17:13
Sean Paterson
Absolutely. Well, I mean, you’ve made it sound like such a dynamic region. We have to ask the we have a number of Scottish entrepreneurs and businesses here that would be keen to explore international expansions and particularly into such a thriving region as ASEAN. So for those looking at the region, where do you see some of the opportunities for these businesses?

What area should they be paying attention to? What markets should they maybe go into?

00:04:17:15 – 00:08:25:11
Gavin Wilkins
Well, it’s a big question, I guess, because it’s a it’s a big market with the dangers of of a big region like ASEAN. This is generalising across many diverse economies, cultures and opportunities. But just dealing with that question, I guess, in reverse, the the the first thing that I’d be encouraging Scottish companies and entrepreneurs looking to expand into ASEAN is to think about Singapore as one of the founding members of ASEAN.

And it’s it’s always been respected for its economic stability in a business friendly environment. The IP protection regime is strong, it’s strategically well located, and it’s got superb connectivity and advanced infrastructure and all of that underpinned by a highly skilled, multilingual workforce. There’s an extensive network of double tax agreements with more than 80 countries across the globe, and all of those factors combine to make Singapore a strategic gateway for enterprises and corporates from from anywhere in the world, not just Scotland.

They want to set up shop or strengthen their market position in the ASEAN region. So I mentioned Singapore because it’s it’s often whichever ASEAN markets you’re looking to access, Singapore is often a a key plank providing a gateway to those markets and that’s something we’ll probably come back to. Singapore is actually Scotland’s 11th largest export market, its leading export market in Asia.

So that accounts for around £730 million to the Scottish economy. And I don’t think it’s fair to say that Scottish companies have been using Singapore for a long time to access other markets in Asia. So so there is some familiarity there.

In terms of sectors, I talked about that digital economic framework. So so that points to cloud computing, cybersecurity, i.e. smart manufacturing. But beyond that, we’ve we’ve got rising consumer spending power in the region. And that, of course, leads to a shift to more premium products across the ASEAN region. So a lot of potential there for for growing Scottish food and drink exports, specifically Singapore and Indonesia are all very important markets for for opportunities in health-tech energy transition, food and drink and even space.

I guess when you go beyond that, the the research and expertise, research expertise and investment opportunities available in Scotland are also key for ASEAN in terms of providing support for those nations to achieve their net zero goals. So since Scotland’s Green Investment portfolio really demonstrates Scotland as a world leader in future and innovative green industries, and and that in itself has a current value of approximately three and a half billion.

The education sector is another one in Scotland that’s relevant to ASEAN 15 Higher education institutions to choose from in Scotland and leading universities such as Glasgow. I would I would say that first being alumni, Canberra, St Andrews, all of those are well known among ASEAN students and I can vouch for that. You know, there’s people who who I met on my accountancy course all those years ago that that have become friends and I’m still in touch with them and doing business with and as a as a little anecdote that I might throw in the ring.

Ten years ago I was in London dealing with a capital markets transaction for a a malaysian business. And I’ve been through the bio of the management team and the CEO before I met them spotted Glasgow Uni and the the CEO’s Malaysian CEO’s bio. And when we got talking at the start, amazingly we quickly discovered that not only have we lived on on the same streets, but in the same building, but in the same flat over eight years apart.

So in terms of icebreakers, they don’t really get much better than that.

00:08:25:11 – 00:08:45:04
Sean Paterson
Absolutely. As as a St Andrew’s man myself, I’ve seen the, you know, the cachet that it can have having Scottish education. Well, that opens up to the rest of the world. Moving on from that, you’ve mentioned the Oxford can support businesses looking to expand internationally. What sort of things might you do to help the people expand into the region?

00:08:45:06 – 00:10:53:22
Gavin Wilkins
Yeah, absolutely. We’ve talked about the tremendous opportunity that exists in ASEAN for for for Scottish businesses looking to expand internationally. But people also also need to be aware that they’re unique, complex economies and there are potential difficulties, pitfalls and obstacles that you can can fall into along the way. So based on what our clients say, they they value from us.

With that in mind, I suppose the first thing is our experience. We’ve been around for a long time and we’ve got substantial expertise across ASEAN, across Asia, actually in East Asia, and we’ve got around 140 people in Singapore with with more than 20 years of knowledge of of of working successfully to help businesses expand into the ASEAN region.

And with that comes an appreciation of culture and language. Our team in Asia can speak over 29 languages, and we see ourselves really is providing a one stop solution for for starting and managing a business in in ASEAN and in Singapore. So we assist clients with choosing the right kind of entity by using Singapore as a, as a launchpad.

We help them with their compliance requirements, tax and accounting, and that can include looking at tax incentives and other government incentives relevant to their business that they might otherwise find hard to access. Human resource management services is another area we help with helping with employment, visa applications, local compliances and employee needs. But I think above all of that, our clients keep talking to us about our networks because we’ve been there a long time.

We’re often in a position to to help connect our clients with new to the market, with key players and stakeholders relevant to their business. And that’s something that’s highly valued by their clients as they’re seeking to establish new networks and contacts. And in a market, an attractive market, a long way from home.

00:10:53:22 – 00:11:17:20
Sean Paterson
Sounds absolutely brilliant. Into in your experience from those companies that walk through it has supported or perhaps elsewhere in your career, are there any key lessons that you can be learned about how these companies can set up and operate their businesses within the ASEAN region and perhaps more specifically within Singapore? And are there any complexities or obstacles that people need to be aware of?

00:11:17:22 – 00:13:00:06
Gavin Wilkins
There is. I think I think being clear about your market entry plan and your strategy is key. It seems an obvious thing to say, but you know, some people think they can just turn up and work it out when they get there. But but actually, in a complex region, far away from home, you can lose a lot of time and money if that’s the way you go about it.

So I think that a key lesson there is sitting down, working through which sectors you’re trying to target, what incentives are there, what’s the right structure to enter the market with, who are the people you need to do that with? But they are really key things when when entering the market. I think the other thing is, is prioritising administrative and compliance responsibilities, you know, making sure you’ve got the required upfront capital, making sure that the correct filings are made at the right time because, you know, good, good governance and compliance record are a good platform to enter a market if you get them wrong, you know, not only does it slow you down, but the

reputational damage and how people view you can be can be quite damaging. And I think I think over overarching all of that is is finding ways to to overcome language and cultural barriers is obviously going to be key. And you can do that by hiring local talent. We can do it by working closely with a trusted and experienced partner such as folks with the understands the market, what’s required and can help you get set up, get on the ground and get traction quickly.

00:13:00:06 – 00:13:17:21
Sean Paterson
Absolutely brilliant. Well, that sounds fantastic, but just throw in a quick bonus question. Really. So what do you think? Singapore will continue to grow and become a sort of center of international trade? Will it perhaps take over from Hong Kong?

00:13:17:23 – 00:15:24:05
Gavin Wilkins
I think Singapore and Hong Kong are both already very well established Centers for International Trade, and I think they cater to slightly different audiences and markets. I think it’s, you might say Hong Kong, for example, becoming more of a a lens to the world for for Chinese investment or having more of a bias to that. Whereas in the past it’s probably be more biased as a lens to to China for, for the rest of the world.

I think Singapore finds its own way. I don’t think it competes with with Hong Kong. It’s got its own place and you know is a gateway to to ASEAN at a time when when the UK is is putting a lot of effort into into expanding global trade and finding new trading partners and entering a course good cop TPP.

I was the initial was wrong but the Trans-Pacific Partnership you know that this there’s a lot of a lot of chips in the right places a very very strong platform to build build from and a lot of willing you know businesses want to to access these exciting fast growth markets from Scotland into Asia. And and of course, there’s a lot of ASEAN investment looking at looking at coming back the other way and not just in in commercial business areas, but also in terms of hard investments, real assets, real estate and other areas that have often been popular.

Investment choices in Asia. So so lots going on. And I think the future’s particularly bright for Singapore and the ASEAN region as a whole.

And with all of that in mind, we’d be absolutely delighted to hear from from any Scottish entrepreneur or business who’s considering expanding into the region. You know, if that’s just a short conversation too, to point you in the right direction or something bigger doesn’t matter to us. So be a joy to hear from you and hopefully we can get you started on your journey.

00:15:24:05 – 00:15:34:06
Sean Paterson
Excellent. Well spose that sounds like a fantastic place to be and if there’s anyone who’s going to help you in, it’s going to be Oxford. So, Gavin Wilkins, thank you so much for joining us. It’s been absolute pleasure.

00:15:34:08 – 00:15:37:08
Gavin Wilkins
Thank you very much. Sean, it’s been a pleasure to join you.