Returning from a global tour of emerging markets, meeting governments and investors in some of the most interesting and dynamic countries in the world, Dr Henry Loewendahl, Group CEO of WAVTEQ, shares his views on the prospects for emerging markets.
Don't let the headlines stop your investments in TurkeyI started off at the WAIPA World Investment Conference in Istanbul, Turkey, which took place at the beautiful Ciragan Palace Hotel. The presentation by Deputy Prime Minister Mehmet Simsek showed that despite the domestic and international challenges facing Turkey, the technocratic leadership continues its job to steer the economy and drive investment and remains totally committed to attracting FDI. A few weeks after the event ISPAT (Invest in Turkey) organised a press conferences with CEOs of US companies operating in Turkey, who expressed their continued confidence in investing in the country.
For any country facing a challenging economic or political environment the most important job of the investment promotion agency (IPA) is investment retention and cultivating major investors as "investment ambassadors" to promote the country; potential investors are most influenced by what their peers say and do. The Turkish government just announced a tender for the world's biggest solar farm, a $1 billion investment project. My view is that Turkey continues to offer huge investment potential and if Western companies cutback their plans for Turkey, there are plenty of companies from emerging markets who fill the gap and gain competitive advantage, as happened in Russia following sanctions.
We need a new acronym: BRICS must include Indonesia
After my Turkey trip, I went to Jakarta, Indonesia. The numbers speak for themselves - the world's 4th largest population steaming along at 5%+ GDP growth every year. There is no doubt in my mind that Indonesia is poised for economic take-off and will become one of the five biggest contributors to world economic growth over the coming years. Now is certainly the time to invest in Indonesia, especially with the government reducing restrictions for FDI.
I had the pleasure of training over 30 investment officers from BKPM, the national IPA of Indonesia. I was struck by the young, educated and internationally focused cache of staff in BKPM and have to say that some of the exercise presentations were among the best I have seen from working over twenty years in the industry. We are currently working in partnership with BKPM to attract FDI from Canada, and we have received huge interest from Canadian investors across many sectors from services, to agribusiness to manufacturing. But the strongest interest is in renewable energy, where Indonesia offers perhaps the best opportunities in the world for foreign investors.
Ready for businessLess than a week after leaving Indonesia I arrived in Colombia for the fourth time but in a city I had not visited before, Barranquilla. Running a training workshop on FDI with both the national and regional investment promotion agencies from Colombia and from other countries like Costa Rica and Uruguay was a fantastic experience. Of course, everyone was extremely friendly as always in Colombia and LatAm. But what was even more noticeable was that IPAs in Colombia are being run by a very high calibre of predominantly young, dynamic female executives with a very strong understanding of how to attract FDI. A quick google search, showed that Colombia tops the global rankings of the proportion of women in management.
Not only is Colombia progressive but, as I increasingly find in Latin America, many of the global innovations in how to attract FDI are coming from LatAm. I was particularly struck by the focus on performance management. ProColombia, the national IPA of Colombia, has its results externally audited by one of the Big 4 so it can stand over its numbers and its return on investment. Of the 10,000+ IPAs an EDOs in the world I wonder how many can say their FDI results are externally audited? This is just one of the signs of how pro-business Colombia has become and their efforts to incorporate global best practices into government as well as in business. The democratic vote to not (yet) sign the peace deal I think shows the desire of the country to create the foundation of long term stability and prosperity. For any international business looking for a Latin America hub, Colombia should certainly be close to top of the list.
Still the land of opportunityFrom the moment I landed in the huge Johannesburg airport to arriving in the business district of Sandton, it became clear that Johannesburg is one of Africa's most important international business hubs. The huge Ernst & Young office, one of their biggest offices in the world, is a sure sign that the city plays a key role in doing business in Africa. A visit to Nelson Mandela Square and Mandela House in Soweto gives a glimpse to the world-shaking history of the country. As a microcosm of the challenges and opportunities facing the world, the future of South Africa is that of the world. The sense of a shared African identity also stood out from my visit even more pronounced in my mind than any sense of European identity. This shared African identify could well lead to greater levels of integration than has been seen in other parts of the world and drive future growth and development. The contrast between the scale and diversity of Johannesburg and small, wealthy Gaborone was stark. I was in Botswana to give the opening presentation at the BotswanaExpo Trade and Investment Conference. The Botswana Investment and Trade Centre (BITC) organised a visit for speakers to diamond companies, which was not only fascinating to understand the diamond industry but also showed how the efforts of the Botswana government to capture more of the value chain in Botswana is paying off, with trading and cutting operations relocating from countries such as UK and India to Botswana. Botswana also impressed me with its very high levels of education and international experience of government and business professionals and the immaculately maintained and rapidly developing Gaborone. The conference was also one of the best I have attended, with the session on
African entrepreneurs (all hugely successful) demonstrating the unlimited investment opportunities in Africa. I definitely need to come back soon to Africa and would advise any investor to explore the opportunities not only in a BRICS country like South Africa but also in small economies like Botswana; all the countries abound in opportunity.