Mar 10, 2014

Check: "Southeast Asia may also gradually lose its advantage as a manufacturing center."

Today Nikkei Asian Review has a general review on SE Asia market from a perspective of Japanese companies.

Investing in Southeast Asia gets riskier- Nikkei Asian Review
The picture varies from industry to industry, but it is clear that many of the factors that once made the region a highly attractive place for investors -- rising resource prices and policies to stimulate consumption -- are gone.
Tony Nash, managing director of IHS Global Insight, points out a troubling trend in Southeast Asia, even though he is bullish about the region's medium-term economic outlook. In ordinary countries, growth in sales of consumer goods is faster than growth of per-capita gross domestic product, Nash said. The opposite is happening in Thailand. Disposable income in Thailand is decreasing due to an increasing number of dependents per worker, according to Nash.
Some special factors, such as demand related to reconstruction efforts in areas hit by the floods and political turmoil, are complicating the task of assessing market conditions in Thailand. Major structural changes such as the demographic trend could have more important implications for the country or the entire region. Populations in Malaysia and some other Southeast Asian countries are also aging.
Southeast Asia may also gradually lose its advantage as a manufacturing center.
When asked if they thought labor-management disputes would increase in Asia, 80% said yes.  The majority of respondents said management will be reluctant to accept demands for wage hikes amid rising inflation. The likely consequence of such rejections is walkouts or other forms of labor disputes.


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