The All Party Parliamentary Group (APPG) on Trade & Investment returned today from a four day trade mission to Singapore and Indonesia.
Six Members of Parliament, Alok Sharma MP, Iain Wright MP, Chris Kelly MP, John Spellar MP and Brian Donohoe MP were led by committee chair Margot James MP, and accompanied by twelve representatives of the infrastructure, architecture and educational sectors.
One educational body closed a deal with Singaporean investors during the visit. Two other representatives of the business and educational elements of the mission stayed on an extra day to attend meetings with potential customers for infrastructure improvements, bridge building and vocational training in Indonesia.
Singapore is the UK’s largest trading partner in Southeast Asia. The UK is the 4th largest foreign investor in Singapore and the 7th largest in Indonesia. The UK represents almost three-quarters of all Singaporean investments into the European Union. But the UK is down at 20th place in the global league table of exporters to Indonesia.
Britain is well placed in Southeast Asia but could do considerably better than she has to date. Margot James said:
“Over the last half century Britain has been too inclined to depend on a growing domestic and European market and to fall back on Commonwealth links and other natural advantages we enjoy; without pushing hard enough for new business in new markets. A tendency to complacency and a misplaced assumption of superiority was too common for too long after the end of the colonial era. Meanwhile countries like Germany, Japan, France and the US were very organised and focussed on building markets; putting in the time it takes to build relationships in growing markets that can take years to pay off. But there are some outstanding exceptions to this phenomenon and the APPG visited five great British success stories on the visit: GSK and Rolls Royce in Singapore and Prudential, Balfour Beattie and Jardine owned businesses in Indonesia; there is no doubt the tide is turning”.
Members of the mission were amazed by the impact of British architecture in the region. Hundreds of thousands of tourists visit the award winning ‘Gardens by the Bay’ in Singapore and the World Trade Center ll sets a new standard for green skyscrapers in Jakarta.
Members of the trade mission were extremely well received by all the representatives of government, business, public bodies and education who took time to host meetings and visits. There is no doubt that more companies are taking advantage of the excellent service provided to new and would be British exporters by UKTI, Embassy staff and the Singaporean and Indonesian British Chambers of Commerce.
Key learnings from the mission included:
- A huge opportunity for Britain to export educational services throughout ASEAN. Singapore is particularly keen on having a British University set up a school of business and management.
- “We don’t want our kids to be selling coal and palm oil” the Indonesian Trade Minister, H.E. Bapak Gita Wirjawan told members of the mission. The constitution of Indonesia mandates that 20% of public expenditure must go on education and the country will need millions more bachelors and hundreds of thousands more PHDs and Masters during the next decade.
- More than 50% of Indonesia’s population is under the age of thirty. They are hungry to learn but, according to Balfour Beattie, largely unskilled. There is a need for government, the private sector and foreign providers to invest heavily in new standards and vocational learning for those sectors that have been identified as having high growth potential. For example infrastructure, oil and gas, and ICT. Britain is recognised as a world leader in education and should benefit from the undoubted need for more vocational as well as higher education.
- The new and booming middle class in Indonesia, and throughout ASEAN, provide a huge opportunity for luxury goods and services. Although manufactured goods will remain crucial the market for legal, financial and property services is growing rapidly and these sectors are areas in which Britain has a significant comparative advantage. Prudential in Jakarta has just closed a record year of growth in the insurance premium market; the proportion of profits likely to be returned to the UK is valued at £120m.
The trade minister also said that “the Japanese and the South Koreans are successful in Indonesia because they come and set up shop here.” Members of the mission were left in no doubt, as they networked at Embassy and Chamber of Commerce events in both markets, that more resource and better organisation is now becoming available to British companies wanting to participate in the huge growth opportunities in ASEAN.
Singapore and Indonesia are two out of twenty pilot markets for the new business organisation and UKTI joint venture. The majority of the participating business organisations will be overseas British Chambers of Commerce. New money is being invested in joint UKTI and Chamber ventures in the twenty pilot markets identified for this new approach that will arm new exporters with the contacts, relationships and market knowledge they need to invest and profit from the huge opportunities to be found in Singapore, Indonesia and many other parts of ASEAN.