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The Globe and Mail

Expansion-minded Canadian firms eyeing Southeast Asia

The Santhiya Resort at night.

As a Singapore-based executive for the company formerly known as Research In Motion, Greg Wade spent eight years leading the Ontario firm's expansion in red-hot Southeast Asian markets such as Indonesia.

He was surprised by the lack of other Canadian companies exploiting similarly explosive growth opportunities, even as economies boomed in Malaysia, Thailand and the Philippines, and a prosperous middle class with disposable incomes began to emerge across the region.

"The companies that I would interact with would be the usual suspects," said Mr. Wade, who left BlackBerry Ltd. about a year ago but still works in the region, including as vice-president of the Canadian Chamber of Commerce in Singapore. "We would challenge ourselves, 'Name a Canadian brand beyond Bombardier, BlackBerry ...' beyond those brands, it's really difficult to name or identify another major Canadian brand."

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A new survey from the Asia Pacific Foundation of Canada offers a sign that things may be changing – that Canadian companies are warming to the vast opportunities in ASEAN (Association of Southeast Asian Nations) countries, after years of focusing on the emerging markets of the so-called BRIC countries (Brazil, Russia, India and China).

In the report, based on 138 online surveys from mainly C-suite executives, Canadian businesses operating in the region reported extremely optimistic takes on their Asia Pacific operations. More than 60 per cent of businesses surveyed had increased investment in the region over the past two years, 81 per cent of respondents expect to increase investment there in the future, and 63 per cent predict regional profitability to increase in 2014.

Canadian businesses, the survey found, are mainly eyeing future expansion in Indonesia, the Philippines, Malaysia and Singapore, while avoiding riskier, frontier markets such as Myanmar (formerly known as Burma), Laos and Cambodia – places where corruption, poor infrastructure, inconsistent laws and regulations, and a lack of trained personnel remain key concerns.

"Southeast Asia has often been overlooked by Canadian businesses, but this survey suggests to me that perhaps this is changing," said Yuen Pau Woo, president and CEO of the Vancouver-based Asia Pacific Foundation.

"Southeast Asia has traditionally been seen as a disparate group of countries... But in recent years ASEAN countries have made a concerted effort to deepen economic integration, as a result of competition with China and India, and they have come a long way toward creating a regional economic space," he said.

Mr. Woo – and Mr. Wade, who recalled an Ontario trade delegation to India in 2007 that was embarrassingly overshadowed by a Portuguese visit – attribute the lack of Canadian business interest in the region to what they say is the absence of a coherent national strategy toward Asia more generally .

Both men pointed to the success of others, such as Australia and the European Union, in closing free-trade deals with ASEAN countries, while similar Canadian initiatives languish. "There are a variety of reasons, but ultimately it boils down to political will," Mr. Woo said. "The failure to close some of these deals is symptomatic of the on-again, off-again attention that's given to Asia."

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Adam Taylor, a spokesman for International Trade Minister Ed Fast, who is currently in Singapore, said the Canadian government has been focused on Asia, making investments in ports, pursuing economic agreements with countries such as Japan and liberalizing relations with Myanmar.

He said Mr. Fast on Tuesday is launching the first Canada-ASEAN Business Forum, which is designed to improve Canada's economic ties in the region. "Saying we haven't closed any free-trade deals, I think, misses many of the other steps we're taking in the region," Mr. Taylor said.

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