On May 28th, the ambassadors of Thailand, Vietnam, and Indonesia, along with other distinguished guests, visited Business Asema in Oulu to highlight potential business opportunities in their countries. They discussed how Finnish businesses, from SMEs to large global players, can expand in the ASEAN region to meet growing demand. The rapidly advancing region offers abundant opportunities in the ICT sector, making it an ideal time for Oulu-based tech companies and ICT businesses across Finland to seize these opportunities.
Digital Economic Framework Agreement (DEFA) – An Opportunity to Negotiate
The Digital Economic Framework Agreement (DEFA) among Southeast Asian nations presents a strategic opportunity for businesses to negotiate and enter the digital economy. This framework aims to harmonize digital regulations, enhance cybersecurity, and promote cross-border e-commerce. Companies can leverage this agreement to streamline operations, reduce barriers, and expand their digital footprint in the region.
ASEAN as a Leader
The Association of Southeast Asian Nations (ASEAN) is positioning itself as a leader in various economic and environmental initiatives. ASEAN’s commitment to carbon neutrality, digitalization, and economic integration underscores its pivotal role in shaping the region’s future.
Thailand’s Climate and Environmental Initiatives
According to H.E. Miss Chavanart Thangsumphant, Ambassador of Thailand and Mr. Kosin Phonmang, Counsellor of the Royal Thai Embassy, Thailand faces significant air pollution challenges, particularly in urban areas. To address this issue, Thailand seeks support from Finland, known for its expertise in air quality management and environmental technologies.
The BCG Model to Achieve Thailand’s Climate Goals
Thailand’s Bio-Circular-Green (BCG) Economy Model aims to balance economic growth with environmental sustainability. This model focuses on 4+1 key industries.
- 1. Agriculture and Food
- 2. Wellness and Medicine
- 3. Energy, Materials, and Biochemicals
- 4. Tourism
As the +1 Thailand targets the circular economy, emphasizing waste-to-energy projects, automation, and digital technologies.
According to Mr. Kosin Phonmang, this is where ICT companies and other companies in the Finnish tech industry can step in to foster the climate action goals of Thailand.
Waste to energy, automation, telecommunication and digitalization are key areas of Thailand’s circular economy.
Thailand is investing in waste-to-energy plants, incorporating advanced automation and digital technologies to convert waste into energy efficiently. BMH technology plays a critical role in these initiatives, enhancing the country’s waste management capabilities.
Thailand’s Electric Vehicle (EV) policy mandates that one-third of vehicles be electric by 2030. This policy drives the demand for EV batteries and recycling solutions, creating opportunities for innovation and investment in the EV sector.
Mr. Kosin Phonmang emphasized the significant growth potential for businesses in key subsectors such as the Internet of Things (IoT), ICT security solutions, cloud computing, telecommunications, infrastructure, and network management. He also noted that Thailand is prepared to embrace and integrate 5G infrastructure and devices into local businesses.
Vietnam’s Rapid Economic Growth
Vietnam is one of the fastest-growing economies globally, with robust growth in sectors such as computers, electronics products, and components. The ambassador of Vietnam Mrs. Pham Thi Thanh Binh discussed the possibility of how Finnish companies can tap into the Vietnamese market. The country prioritizes several key sectors for investment:
- Electronics and Semiconductors
- Renewable Energy
- Innovation R&D
- Digital Economy and Digitalization
- Hi-Tech Agriculture
- International Financial Centre
Investment Incentives: Vietnam offers numerous incentives for investors, including stable political conditions, and competitive production costs. The labour cost in Vietnam remains lower than in neighbouring countries, and the government provides general tax incentives, particularly for the tech and education fields.
Additionally, Vietnam’s amicable relationships with the international market have positively influenced 15 Free Trade Agreements connecting the country to 60 countries and territories which makes Vietnam a country that any company could approach through their businesses if they fall into one or more of the above-mentioned sectors.
These sectors highly reflect Finland’s strengths in technological advancements hence it would be ideal for Finnish companies ranging from SMEs to global companies to consider Vietnam as a potential customer.
As of February 2024, Finland has ranked 58/140 countries and territories investing in Vietnam with 35 projects with a total capital of over 47 million US dollars. They hope to strengthen the relationship between Finland and Vietnam in the upcoming years.
Indonesia: the largest economy in Southeast Asia
H.E. Ratu Silvy Gayatri, Ambassador of the Republic of Indonesia to Finland and Estonia also presented the current economic situation of Indonesia and why Finnish companies should consider Indonesia in their investment plans. According to H.E. Ratu Silvy Gayatri Indonesia is the largest economy in Southeast Asia, offering diverse opportunities for international businesses.
Currently investment opportunities in Indonesia are in high demand under the following key sectors:
- 1. Tech Infrastructure and Innovation
- 2. Education
- 3. Wastewater Treatment
- 4. Aviation
- 5. E-commerce
Over the past few years, Indonesia-Finland trade has gained significant recognition in the global import-export market. While Finland imports chemical products, rubber, ceramic products, footwear and apparel and clothing accessories from Indonesia, they export machinery & mechanical appliances, electrical machinery and pulp, paper cellulosic materials to Indonesia.
H.E. Ratu Silvy Gayatri states that the opportunity for Finland to be a key investor in smart appliances is constantly growing in Indonesia and significant urban development plans facilitate this opportunity for Finnish businesses in the ICT industry.
New Capital City: Nusantara: Indonesia’s plan to move its capital from Jakarta to Nusantara in Kalimantan presents significant investment opportunities. The development of Nusantara as a smart city will require advanced infrastructure, technology, and sustainable solutions.
Incentives for Foreign Direct Investment (FDI): Indonesia offers attractive incentives for FDI, including tax holidays, super tax deductions, and import duty exemptions. These policies aim to attract foreign investors and foster economic growth.
Final Remarks
Southeast Asia presents a wealth of opportunities for businesses and investors. The region’s youthful demographics, economic dynamism, and commitment to sustainability and digitalization make it an attractive destination. By leveraging strategic agreements, like the DEFA, and focusing on key sectors and markets, businesses can capitalize on the robust growth and diverse opportunities in Southeast Asia.
The trade relationship between ASEAN and Finland is poised for growth, facilitated by the Finland-Southeast Asia Business Association, which promotes bilateral trade and investment opportunities.
If you are interested in investing in the Southeast Asian region, kindly contact us and we are happy to guide you to the right place for more information, negotiations and collaborations!
Regards,
ICTOulu Team