Which Way Will South Asia Look?

Like all of South Asia, Pakistan sits on the fault-line between the two great regional groupings of the world: ‘The West’, which we can define as EMEA and the Americas and ‘The East’ which we can define as the countries of Asia Pacific. Others in this issue may have written about the West – I shall focus on the East. There are three key factors.

Accelerated Change

It can be said that Covid-19 has changed the world. The evidence is all around us. Restrictions on travel and social activity. Economic downturns. The shock of losing friends, colleagues and loved ones to a terrible and unfamiliar disease. But like all pandemics for the past thousand years, Covid-19 will pass; vaccines are in development and once they are available, the costs of distribution are relatively low. Bill Gates recently estimated these as $62 billion – the Gates Foundation could fund these from its own resources alone. When the pandemic passes, much of human society will return to normal. APAC, where the disease first arose, was ‘first in and first out’ and provides a guide to what will happen to the rest of us. We saw months ago that the clear skies of Beijing soon became smoggy again as commuters returned to their cars. My own company, thenetworkone, recently hosted a webinar talking about remote working in agencies – our delegate from Hong Kong told us that all his colleagues were back working in their office, as were other agencies in his city. What has happened, in society generally, and in professional services sectors like ours in particular, is that Covid-19 has not caused long-term change, but has accelerated those changes which were already happening. These include:

• The rise and rise of e-commerce and the decline of physical retail stores.
• Hybrid work patterns; a mix of remote and in-office working.
• More flexible working hours, aiding the assimilation of women into the workforce at senior levels.
• The adoption of digital communications technology: Zoom, Teams and other videoconferencing technologies (Microsoft’s decision not to alienate China seems very prescient).

Improved health and hygiene awareness. The super-spreaders of Covid-19 – maids, migrant workers, university students, air travellers, party-goers and centrally-controlled air conditioning – were the same as those that spread SARS and presumably the annual arrival of the latest strain of influenza. The same learnings can be applied. Once we have dealt with Covid-19, we will be better prepared for Covid-23.

The Cultural Divide

What is truly a game-changer has been the divide between APAC and the rest of the world in terms of tackling Covid-19. Initially, some commentators saw this as a divide between the two world superpowers, China and the US. But clearly, it is a lot more than that. Throughout Asia Pacific, society’s response has been consistent. Closing national borders; locking down cities, states and whole countries; rapid test-and-trace activity to identify outbreaks and effective technology-based systems to prevent rule-breaking. Korea closed down the Church in Daegu and the gay clubs of Seoul. Japan cancelled the Olympics. Countries like Thailand and Vietnam whose economy depends on tourism, closed their borders. Westernised Anglophone countries with Caucasian populations (Australia and New Zealand) followed the example of China and Korea and Singapore, not the UK and the US. These strategies worked because the people in those countries voluntarily accepted highly intrusive restrictions on their personal freedoms and a complete over-ride of their personal data privacy. This divide is cultural: the mask-wearers and the non-mask-wearers, if you like. It is not a divide along the lines of politics, religion or colour. Like Germany in the eighties or Korea in the 2000s, both sides are looking over the wall to see whose system works the best. I know where my money is. If I were starting my marketing career in Asia today, I would certainly train as a data scientist, rather than as a government regulator.

The Economic Divide

Who said “culture eats strategy for breakfast”? East-West and West-East trade is no longer a driving force in economic growth. Increasingly, we see trade working within broad time zone groupings. Trade in goods is hampered by transportation times and tariff barriers. Who wants to ship a container from APAC to Europe (a six week voyage) when import tariffs may have changed by the time it arrives at the port? Trade in services is hampered by time zones: APAC, EMEA and the Americas have a maximum internal time difference of three to four hours. APAC and the US have typical time differences of 11 to 13 hours. Exporting and outsourcing benefits from the connectedness of people; not just wires and waves. The result for our business in marketing and communications will be a great deal more focused on intra-regional trade and brand development; think Alipay, Didi Chuxing or Grab. As for global companies, we will see the acceleration of local and regional autonomy in their business and brand management. By the time Covid-19 travel restrictions are lifted, the local management will surely have figured out how to run the business without Captain America arriving to save the day. As urbanisation (the principal driver of economic growth) continues to spread throughout APAC, Asia will of course gain GDP leadership. Two-thirds of the world’s population live there.

One Big Question Remains

What is the position of Pakistan and the other countries of South Asia? Or to phrase it another way: Is South Asia (home to almost one third of humanity), a part of APAC or more connected to the West? Traditionally, the West/East or Eurasian fault line runs through Turkey. But the cultural response of South Asian countries to Covid-19 has clearly mirrored the West, much more closely than the East. Which way does South Asia look? Recently, I heard a presentation (virtual, of course) by Parag Khanna, arguably the leading world authority on these issues. We tend to look at commerce in terms of goods and services. He looks at it in terms of people – specifically, the migration of people. Khanna sees the current migration issues as almost incidental. In his analysis, the pandemic is accelerating the decline of populist politicians, whose appeal is the creation of barriers to migration. Long term, he looks at them in terms of population demographics. The majority of the world’s population are young, single, Asian, urban and childless. Countries with ageing populations will have a supply shortage of people of working age. Already, the median age of the population in the EU is 43; in China, it is 46. Whereas the median age of the population in South and South East Asia (2.5 billion people) is typically in the low 30s. There is a whole generation coming, where South and South East Asia will supply the world’s workforce to North Asia and the West.

Which way will South Asia choose to look? Supply seeks demand. I think the West will have the greatest need.

Julian Boulding is President and Founder, thenetworkone. julian.boulding@thenetworkone.com