ASEAN Building Social Infrastructure, Not Just Roads
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I’ve covered in the past the growing physical integration that ASEAN has prioritized to pave the way for the Asian Economic Community (AEC) due to become official in 2015. But, what has not been covered is the growing role that social media will play in enhancing the physical movement of goods and people. Since ideas are as important as things, ASEAN recently revealed plans to make use of social media tools to increase economic and international cooperation and foster a greater sense of community throughout the region.
This comes as the ten participating nations prepare to enter the AEC under the three pillars of peace (security community), prosperity (economic community) and socio-cultural community (people). The goal is promote the region as a stable, safe, business-friendly ecosystem of interconnected economies and populations working together for the benefit and prosperity of all members.
Staying true to its goal, ASEAN has posted videos on YouTube outlining the vision behind the bloc and how it will play out. The organization has over 4,900 followers on Twitter.
The Brain Train
During a speech at World Economic Forum (WEF) in Bangkok, Indonesia’s president Susilo Bambang Yudhoyono joined other officials in stressing the importance of the bloc to improve connectivity as well as regional collaboration in transportation, sustainable food production, commerce, energy, IT, banking, education, innovation and social media.
Given its dominant position in the region’s delivery of media Singapore Telecom (SingTel), a major component of the iShares MCSI Singapore Index ETF (NYSEMKT: EWS), will play an instrumental role in building these communication bridges. They recently added mobile advertising platform provider Amobee to their stable and are beginning the rollout of 4G technology in Singapore.
ASEAN secretary-general Surin Pitsuwan urged countries to invest more in R&D and technology. Currently only Singapore is in line with international benchmarks, spending 2.6% of GDP on R&D. Thailand fared the worst at around 0.1%.
ASEAN is a high growth region for internet and mobile adoption. Wireless communications economics are so favorable versus wired that the shortened development cycle means surprisingly high levels of access. The technology may not be first-rate, but it does not have to be to be powerful relative to the existing technology. SingTel serves those markets. More developed nations like Singapore, Thailand, and Indonesia already have well-connected and digitally-savvy populations with high internet and social media penetration rates. Others are experiencing explosive growth. This is also very true in Malaysia. The iShares MSCI Malaysia Index ETF (NYSEMKT: EWM) is much more balanced in its holdings than others in this region, holding only 30% in financials and nearly 23% in Telecommunications and Utilities.
With a population of 90 million, Vietnam is the country to watch as internet adoption is rapidly catching up with its more advanced neighbors, especially with near universal 3G mobile coverage. Vietnam’s Viettel was recently tagged by GSMA Wireless Intelligence as being one of the 10 best mobile operators in the world.
Adoption of social media in these countries is also on the rise. According to SocialBakers, Facebook (NASDAQ: FB) penetration in Singapore currently stands at about 39%, or 1.89 million users. Indonesia has the region’s largest Facebook population, and was just recently surpassed by India as the 2nd biggest user base in the world behind the United States. Indonesians are among the most prolific Twitter, Foursquare and Facebook users in the world.
About 50% of internet users in Thailand have a Facebook account. In Vietnam the government frequently blocks access to Facebook without warning, but people easily circumvent the block using proxies. The dominant social network in Vietnam is Zing.
Looking at some recent usage statistics, Google’s (NASDAQ: GOOG) Google+ has embarrassingly low engagement numbers in terms of time spent and at this point looks unlikely to be a challenger for Facebook for users time. Pinterest, however, is seeing usage times rising beyond that of both Twitter and Linkedin (NYSE: LNKD). LinkedIn’s presence in ASEAN countries looks to be directly proportional to the level of business development in the country, with Singapore having about 9% penetration, Malaysia at around 1.5% and Indonesia 0.6%.
Watching how these disparate countries resolve these issues at an official level will be a key to how well the goals of the AEC match the reality of it.
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