South Korea poised to crash and burn in 2025 – Asia Times

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It’s difficult to imagine any Eastern country more appreciative of South Korea’s accomplishments in 2024.

President Yoon Suk Yeol declared martial law just the last fortnight, reversed six hours later, was impeached in parliament amid large street protests, and is now facing a historic arrest permit.

As if that weren’t enough conflict and woe, Korea experienced its worst local aircraft disaster in more than 20 years, killing over 181 people and invoking grave fresh concerns about the safety of Asian skies. &nbsp,

Korea’s really nasty December deepened what was already anything of a midlife crisis time for Asia’s fourth-biggest business. This may be as good as it gets as a madly uncertain 2025: Seoul’s very destructive elections are about to meet with the Trumpian wind to occur.

Even if, best-case scenario, “increased US protectionist measures imply lower&nbsp, taxes on&nbsp, Korean&nbsp, imports than on various trading lovers”, says analyst Brian Coulton at Fitch Ratings, “declining demand from China and the US, which&nbsp, collectively accounted for around 40 % of&nbsp, Korean&nbsp, commodities exports in&nbsp, 2023, may adversely affect exports”.

Korea will be directly at the heart of the potential weaker Chinese demand-related collateral damage, despite the president-elect’s threats of 60 % tariffs against China. Japan, too, but then Tokyo isn’t embroiled in a political imbroglio the likes of which Seoul hasn’t seen in decades.

Something that Japan and Korea have in common, though, is being snubbed by Trump. Trump has rebuffed repeated requests from Yoon and Japanese Prime Minister Shigeru Ishiba for a Mar-a-Lago tee time since his re-election on November 5.

Both Yoon and Ishiba have watched as Trump met with a parade of world leaders, including Canada’s Justin Trudeau, France’s Emmanuel Macron, Ukraine’s Volodymyr Zelensky, Hungary’s Viktor Orban, Argentina’s Javier Milei and even the UK’s Prince William. But so far, he’s had no time for Washington’s top North Asian allies.

Anyone’s guesses whether Trump intends to impose tariffs on Seoul and Tokyo. Or that Trump’s hopes of a “grand bargain” trade deal with China take precedence.

Seoul’s distracted legislators won’t be doing much to improve Korea’s competitive game as Yoon awaits a possible arrest and his fate in the courts in the months to come.

Even before Yoon’s bizarre martial law decree on December 3, his People Power Party wasn’t getting much done to level economic playing fields, address near-record household debt, increase productivity, empower women or improve corporate governance.

Yoon’s first 966 days in office were anything but a reformist whirlwind. In other words, his party has a slim chance of coming up with a solid policy response to the Trump 2.0 shock.

The Bank of Korea will become even more dependent on that. The BOK has taken the lead in managing one of the world’s most open major economies since Yoon took office in May 2022. Governor Rhee Chang-yong is now in the hot seat as never before due to the political vacuum in Seoul.

Before Yoon’s short-lived martial law stunt, Seoul was planning to shore up key sectors as headwinds from Washington intensify. A package of support measures is included for the crucial semiconductor industry.

Korea, which is home to the world’s leading memory chip manufacturers Samsung Electronics and SK Hynix, is more unsure than most other nations about Trump’s tariff plans. Finance Minister Choi Sang-mok stated on December 2 that” the next six months will be the golden time that will decide the fate of our industries.”

Choi continued,” The role of the government must shift from a supporter to a player working alongside businesses, given the current challenges, including global economic shifts under the incoming US administration, competition from emerging countries, and the rapid reorganization of global supply chains.”

Since then, though, Choi has been elevated to acting president, the third to serve as president this month. ” So South Korea’s most bizarre and explosive political crisis in decades just got even weirder”, says Ian Bremmer, president of Eurasia Group.

That leaves his successor with the responsibility to spearhead support for semiconductor companies, from tax incentives to fiscal assistance, to advance the tech ecosystem. And to do so in the midst of growing political slurs.

These initiatives range from top-down initiatives to subsidizing the costs of burying transmission cables for semiconductor clusters in cities like Yongin and Pyeongtaek.

Already, Choi is doing his best to reassure the public. We are confident that our robust and resilient economic system will ensure quick stabilization, Choi said on December 27.” Although we are facing unexpected challenges once again, we are confident that we are facing unexpected challenges.”

Yet Choi inherits a 2025 budget that’s US$ 2.8 billion less than the government had hoped for. In addition, he now manages a second national crisis as a result of the Jeju Air jet‘s collision.

According to economist Gareth Leather of Capital Economics,” the crisis is already having an impact on the economy.” ” The crisis is unfolding against a backdrop of a struggling economy”, he says.

Gross domestic product, Leather notes, is expected to be just 2 % this year amid slowing global growth. ” Longer term, political polarization and resulting uncertainty could hold back investment in Korea”, Leather says, pointing to how Thailand’s turmoil since a 2014 coup undermined its economy.

Other economists are more optimistic. Yoon Suk Yeol is a side effect of the growth, according to economist Park Sang-in of Seoul National University, who spoke to AFP.” We have come from being one of the world’s most developed economies in very few years. Korea’s society was mature enough to refute his crazy deeds.

According to BMI Country Risk & Industry Research,” we anticipate only moderate effects on the economy and financial markets as the Ministry of Finance and the Bank of Korea have responded quickly by reassuring investors.”

Notably, according to BMI,” the central bank is committed to boosting short-term liquidity and implementing measures to stabilize the foreign exchange markets, which supports our position that the risks associated with the South Korean won should be kept under control for the time being.”

Krishna Guha, an economist at Evercore ISI brokerage, argues that” South Korea’s democratic institutions and culture have withstood the stress test. However, the fact that it took place at all is extraordinary and troubling.

However, the key is now, especially now that Yoon is facing an arrest warrant, when and how the political crisis ends. Its longevity is key to the Korean wo n’s outlook.

” If domestic political instability continues and external credibility in Korea decreases, the wo n’s price could fall further”, says economist Seo Jeong-hoon at Hana Bank.

According to economists at T Rowe Price, “political turmoil appeared to be continuing to weigh on investor sentiment in South Korea.”

Even before the blow-after-blow that hit Korea in December, Yoon’s presidency had been awash in challenges and controversies. Soon after Yoon took over, the Korean won fell into disrepute, North Korea launched a wave of provocations, and Seoul received heavy criticism for handling a 159-person crowdcrash that killed 159 people on Halloween 2022.

All too quickly, Yoon’s approval rating fell below 30 %, the danger zone for any leader in Seoul promising bold structural reform.

Yoon is the fourth leader of Korea to ascend to power since 2008, promising to produce more economic energy from the top rather than the bottom down. Broadly speaking, that meant taking on the” chaebol system” led by family-owned behemoths like Samsung that helped propel Korea into the ranks of the top 12 economies.

The reality is that Korea Inc. is aware that a lot of its business is being sold for profit. China and other rising Asian powers are now rivals in cars, electronics, robots, ships and popular entertainment. Taiwan is constantly upping its innovative game, while startups like Indonesia and Vietnam are boosting the competitiveness and dynamic of the race for tech “unicorn” startups.

The best way for Korea to maintain its high standard of living is to create innovations that increase the rate of economic growth. That’s why Yoon and the three leaders who preceded him pledged an innovative “big bang” to move Korea into higher-value sectors.

Between 2008 and 2013, Lee Myung-bak came and went without fundamental changes to the chaebol system. Then came Park Geun-hye, Korea’s first female president. In 2013, she took office with bold talk of devising a more” creative” economy.

Park vowed to expand tax breaks for startups, strengthen antitrust laws, and fine large corporations for stealing profits that could be used to bolster paychecks.

Park ended up going easy on the chaebols. Yet she did succeed in enlivening Korea’s startup economy. Her efforts to increase the cash flow to innovators helped make Korea one of the top 10 incubators for tech unicorns, or businesses with market capitalizations greater than US$ 1 billion.

Moon Jae-in, Park’s successor, expanded the program. The problem is that startups continue to be hogging the financial fuel they need to become major game-changers. That’s still Korea’s dilemma today.

It has loads of startups, but the conglomerates “don’t often allow space” for them to thrive and become medium-sized enterprises, notes Yukiko Fukagawa, an entrepreneurship expert at Waseda University.

Moon took power in 2017 with ambitious plans to pursue” trickle-up economics”. Moon, a more liberal leader than the previous two, aimed to stifle economic control from Korea’s rigid corporate structure to boost competition.

His signature strategy of enticing the middle class was essentially the opposite of the strategies that Trump, former Japanese Prime Minister Shinzo Abe, and Ronald Reagan championed decades earlier. Moon resigned and delegated his economic management responsibilities to the BOK once he realized how challenging the task was and how messy the political fallout would be.

So has Yoon these last 31-plus months. Now, as acting President Choi manages dueling crises, he faces a wildly uncertain 2025 – both domestically and internationally.

Despite the political unrest, Korea Inc. has a chance to up its game. According to Sohn Kyung-shik, chairman of the Korea Enterprises Federation,” companies must also make more proactive efforts to economic recovery and job creation during these difficult times.”

In top-down Korea, though, that might be easier said than done. Especially as the” Trump trade” approaches Korea, which causes utter chaos in domestic politics.

Follow William Pesek on X at @WilliamPesek

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South Korea poised to crash and burn in 2025 – Asia Times

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It’s difficult to imagine any Eastern country more appreciative of the 2024 era than South Korea.

President Yoon Suk Yeol declared martial law just the last month, reversed six hours later, was impeached in parliament amid large street protests, and is now facing a historic arrest permit.

As if that weren’t enough conflict and woe, Korea experienced its worst local aircraft disaster in more than 20 years, killing over 181 people and invoking grave fresh concerns about the safety of Asian skies. &nbsp,

Korea’s really nasty December deepened what was already anything of a midlife crisis time for Asia’s fourth-biggest business. This may be because good as it gets as a madly uncertain 2025: Seoul’s very destructive elections are about to meet with the upcoming Trumpian surprise.

Even if, best-case scenario, “increased US protectionist measures imply lower&nbsp, taxes on&nbsp, Korean&nbsp, imports than on various trading companions”, says analyst Brian Coulton at Fitch Ratings, “declining demand from China and the US, which&nbsp, collectively accounted for around 40 % of&nbsp, Korean&nbsp, commodities exports in&nbsp, 2023, may adversely affect exports”.

Korea will be directly at the heart of the collateral damage zone of potentially weaker Chinese demand, despite the US president-elect’s threats of 60 % tariffs directed at China. Japan, too, but then Tokyo isn’t embroiled in a political imbroglio the likes of which Seoul hasn’t seen in decades.

Something that Japan and Korea have in common, though, is being snubbed by Trump. Trump has been turned down by Yoon and Shigeru Ishiba for a Mar-a-Lago tee time since his re-election on November 5.

Both Yoon and Ishiba have watched as Trump met with a parade of world leaders, including Canada’s Justin Trudeau, France’s Emmanuel Macron, Ukraine’s Volodymyr Zelensky, Hungary’s Viktor Orban, Argentina’s Javier Milei and even the UK’s Prince William. But so far, he’s had no time for Washington’s top North Asian allies.

Anyone’s guesses whether Trump intends to impose tariffs on Seoul and Tokyo. Or that Trump’s hopes of a “grand bargain” trade deal with China take precedence.

Seoul’s distracted legislators won’t be doing much to improve Korea’s competitive game as Yoon awaits a possible arrest and his fate in the courts in the months to come.

Even before Yoon’s bizarre martial law decree on December 3, his People Power Party wasn’t getting much done to level economic playing fields, address near-record household debt, increase productivity, empower women or improve corporate governance.

Yoon’s first 966 days in office were anything but a reformist whirlwind. In this way, there are no guarantees that his party will be able to come up with a comprehensive policy plan in response to the Trump 2.0 shock.

The Bank of Korea will become even more dependent on that. The BOK has taken the lead in managing one of the world’s most open major economies since Yoon took office in May 2022. Governor Rhee Chang-yong is now in the hot seat as never before due to the political vacuum in Seoul.

Before Yoon’s short-lived martial law stunt, Seoul was planning to shore up key sectors as headwinds from Washington intensify. A package of support measures is included in the chief among them for the crucial semiconductor industry.

Korea, which is home to the world’s leading memory chip manufacturers Samsung Electronics and SK Hynix, is more unsure than most other nations about Trump’s tariff plans. Finance Minister Choi Sang-mok stated on December 2 that” the fate of our industries will be decided in the final six months.”

The government must change from a supporter to a partner working alongside businesses, Choi continued, “given the current challenges, including global economic shifts under the incoming US administration, competition from emerging countries, and the rapid reorganization of global supply chains.”

Since then, though, Choi has been elevated to acting president, the third to serve as president this month. ” So South Korea’s most bizarre and explosive political crisis in decades just got even weirder”, says Ian Bremmer, president of Eurasia Group.

That leaves his successor with the responsibility to spearhead support for semiconductor companies, from tax incentives to fiscal assistance, to advance the tech ecosystem. And to do so in the midst of growing political slurs.

These initiatives range from top-down initiatives to subsidizing the costs of burying transmission cables for semiconductor clusters in cities like Yongin and Pyeongtaek.

Already, Choi is doing his best to reassure the public. We are confident that our robust and resilient economic system will enable quick stabilization, Choi said on December 27.” We are facing unexpected challenges once more.

Yet Choi inherits a 2025 budget that’s US$ 2.8 billion less than the government had hoped for. In addition, he now manages a second national crisis as a result of the Jeju Air jet‘s collision.

According to economist Gareth Leather at Capital Economics,” There are already indicators that the crisis is having an impact on the economy.” ” The crisis is unfolding against a backdrop of a struggling economy”, he says.

Gross domestic product, Leather notes, is expected to be just 2 % this year amid slowing global growth. ” Longer term, political polarization and resulting uncertainty could hold back investment in Korea”, Leather says, pointing to how Thailand’s turmoil since a 2014 coup undermined its economy.

Other economists are more optimistic. Yoon Suk Yeol is a side effect of the growth, according to economist Park Sang-in at Seoul National University, and we have come from being an underdeveloped nation to one of the world’s most dynamic economies in a short period of time. His crazy actions were resisted by Korean society because it was mature enough.

According to BMI Country Risk & Industry Research,” we anticipate only moderate effects on the economy and financial markets as the Ministry of Finance and the Bank of Korea have responded quickly by reassuring investors.”

Notably, according to BMI,” the central bank committed to boosting short-term liquidity and enacting measures to stabilize the foreign exchange markets, which aligns with our view that risks around the South Korean won should remain contained for now.”

Krishna Guha, an economist at Evercore ISI brokerage, argues that” South Korea’s democratic institutions and culture have withstood the stress test. However, the fact that it even occurred is extraordinary and troubling.

However, now that Yoon is facing an arrest warrant, it is important to know when and how the political crisis ends. Its longevity is key to the Korean wo n’s outlook.

” If domestic political instability continues and external credibility in Korea decreases, the wo n’s price could fall further”, says economist Seo Jeong-hoon at Hana Bank.

According to economists at T Rowe Price, “political turmoil appeared to be continuing to weigh on investor sentiment in South Korea.”

Even before the blow-after-blow that hit Korea in December, Yoon’s presidency had been awash in challenges and controversies. Soon after Yoon’s rule, the Korean won, North Korea launched a wave of provocations, and Seoul received heavy criticism for handling the 159-person crowdcrash that killed 159 people on Halloween 2022.

All too quickly, Yoon’s approval rating fell below 30 %, the danger zone for any leader in Seoul promising bold structural reform.

Yoon is the fourth leader of Korea to ascend to power since 2008, promising to produce more economic energy from the top rather than the bottom down. Broadly speaking, that meant taking on the” chaebol system” led by family-owned behemoths like Samsung that helped propel Korea into the ranks of the top 12 economies.

The reality is that Korea Inc. is aware that a lot of what it does well has been commercialized. China and other rising Asian powers are now rivals in cars, electronics, robots, ships and popular entertainment. Taiwan is constantly upping its innovative game, while startups like Indonesia and Vietnam are boosting the competitiveness and dynamic of the race for tech “unicorn” startups.

The best way for Korea to maintain its high standard of living is to create innovations that increase the rate of economic growth. That’s why Yoon and the three leaders who preceded him pledged an innovative “big bang” to move Korea into higher-value sectors.

Between 2008 and 2013, Lee Myung-bak came and went without fundamental changes to the chaebol system. Then came Park Geun-hye, Korea’s first female president. In 2013, she took office with bold talk of devising a more” creative” economy.

Park vowed to expand tax breaks for startups, strengthen antitrust laws, and punish large corporations for stealing profits from employees who squander money.

Park ended up going easy on the chaebols. Yet she did succeed in enlivening Korea’s startup economy. Her efforts to increase the cash flow to innovators helped make Korea one of the top 10 incubators for tech unicorns, or businesses with market capitalizations greater than US$ 1 billion.

Moon Jae-in, Park’s successor, expanded the program. The issue is that startups continue to be sucked into the cash they need to become major game-changers. That’s still Korea’s dilemma today.

It has loads of startups, but the conglomerates “don’t often allow space” for them to thrive and become medium-sized enterprises, notes Yukiko Fukagawa, an entrepreneurship expert at Waseda University.

Moon took power in 2017 with ambitious plans to pursue” trickle-up economics”. Moon, a more liberal leader than the previous two, aimed to stifle economic control from Korea’s rigid corporate structure to boost competition.

His signature strategy of enticing the middle class was essentially the opposite of the strategies promoted by Trump, former Japanese Prime Minister Shinzo Abe, and Ronald Reagan decades earlier. However, when Moon realized the difficulty of the task and the wacky political consequences that would follow, he backed away and delegated economic management responsibilities to the BOK.

So has Yoon these last 31-plus months. Now, as acting President Choi manages dueling crises, he faces a wildly uncertain 2025 – both domestically and internationally.

In spite of the political unrest, Korea Inc. can raise its game. According to Sohn Kyung-shik, chairman of the Korea Enterprises Federation,” companies must also make more proactive efforts to economic recovery and job creation during these difficult times.”

In top-down Korea, though, that might be easier said than done. Particularly with domestic politics in complete chaos as Korea’s” Trump trade” approaches.

Follow William Pesek on X at @WilliamPesek

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From saunas to success: Lessons for Malaysia’s ecosystem from Finland’s startup & VC journey

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  • Govt-entity TEKES was big motivator to Scandinavian world’s success account
  • Malaysia on proper record, won’t take as long as Finland did to reach maturity

In the early 2000s, Finland lacked sufficient private venture capital and angel investment for early-stage startups. TEKES (since rebranded to Business Finland) provided crucial grants, loans, and investments, enabling startups to survive and grow.

From saunas to success: Lessons for Malaysia’s ecosystem from Finland's startup & VC journeyWhen my British university professor gave me a copy of” The Google Story,” twenty years ago, I began my entrepreneurial journey in Helsinki, Finland’s capital. I finished it in one sitting because I was thus captivated by it. I even wanted to own such a business. But people kept telling me:” You are not in Silicon Valley”.

They were correct when they said that Finland hardly had any private money to do high-risk, innovative businesses after the dot com bubbles burst a few years before. Additionally, there was the added problem of looking to global markets from day one because the Finnish business was so small ( only 5 million people ).

20 years after, Finland is now in the lead in terms of personal money in terms of GDP. We have seen rainbows such as Supercell, and Wolt, as well as a good network of Soonicorns quite as Iceye, Swappie. I’m pleased to discover Finland doing well, but since I’m now setting up my business in Malaysia, I can’t help but notice significant similarities between the business ecosystem there that is still developing and the one I saw 20 years earlier.
Looking back, if I was to point out a major catalyst to Finland’s success story of the last 20 years, I would not find any better example than a government-entity called TEKES ( now rebranded to Business Finland ) which would be akin to a modern day Khazanah, although not exactly a sovereign wealth fund.

TEKES, which was funded by Finnish taxpayers periodically, has previously had a significant impact on the development of the business ecosystem in Finland, contributing to a number of positive outcomes that might not have been realized without its existence.

What are some of the main efforts and effects?

1. Kickstarting the Scandinavian business ecology

Initial funding gaps filled: In the early 2000s, Finland lacked adequate private venture capital and angel funding for early-stage companies. TEKES provided critical offers, money, and purchases, enabling businesses to survive and grow.

Encouraging risk taking: By de-risking early-stage development through cash, TEKES encouraged companies to do ambitious jobs, fostering a culture of development and risk taking. Additionally, since 2010, Finland has annually observed the” National Day of Failure” on October 13 to honor the achievements of failed businesses and end the stigma that surrounds entrepreneurs who have previously failed. On this day, you’ll frequently see both recently failed and most successful groups converge on the level and treated to equal respect.

2. Enabling world victory reports

Startups like Rovio and Supercell: Companies such as Rovio ( Angry Birds ) and Supercell ( Clash of Clans ) received support from TEKES during their formative years. Without this money and assistance, their world success stories might not have been feasible.

Greater impact on industries: TEKES-supported startups helped placement Finland as a gateway for gambling and wireless technology innovation.

3. fostering a culture of innovation and individual capital

Support for education: Through funding initiatives like Aalto Entrepreneurship Society, which afterwards founded Slush, TEKES created a new era of tech-savvy business owners.

Innovative mindset: It encouraged Estonian citizens to view entrepreneurship as a practical and prominent career path when formerly working for a huge multinational was the preferred career path.

4. Development of supporting buildings

Startup Sauna and other accelerators and incubators: TEKES provided funding for the establishment of accelerators and incubators, which afterwards became crucial for connecting Scandinavian startups to international networks.

Ecosystem Growth: TEKES ‘ investments in local innovation ecosystems have had a direct and indirect impact on efforts like Slush, one of the largest startup activities ever held worldwide.

5. Attracting international funding

International attention: By nurturing companies with high-growth possible, TEKES made Finland attractive to foreign investors, bringing much-needed walk funds into the ecosystem.

Scaling internationally: TEKES’ programs like the Young Innovative Companies ( NIY ) helped Finnish startups expand globally, making Finland a recognized innovation hub.

Fun truth: my first business, Muxlim, was a member of the TEKES Young Innovative Businesses program, which eventually won the President of Finland’s nomination for internationalization. It enabled us to consider international from first on and lift our ambition&nbsp, to&nbsp, the&nbsp, potential.

6. societal impact and sustainability

Green technology command: TEKES invested considerably in green technologies, making Finland a chief in areas like bioeconomy and solar energy solutions. Malaysia needs to find the strengths-matching niches and work with them until they are powerful worldwide.

Advances with social effect: By supporting education and health technologies, TEKES promoted enhancements that improved the quality of life in Finland and worldwide. Akin to Khazanah’s Dana Impak.

There were so many beneficial outcomes that might not have been possible without TEKES.

Allow me list four of them.

Avoidance of Brain Drain: Without financing and habitat support, Scandinavian talent does had moved abroad in search of better opportunities. Our guest speaker there introduced his talk by saying,” I’m assuming you are all looking to relocate to Singapore eventually,” during a recent trip there with other Malaysian startups.

Gaming Industry Boom: TEKES ‘ funding provided a foundation for Finland’s thriving gaming sector.

Technology Transfer: Without TEKES ‘ assistance, collaborations between academia and industry might not have been as successful.

Innovation Culture: Finland’s transformation into an innovation-driven economy owes much to TEKES ‘ ability to fund high-risk, high-reward projects.

The strategic investments made by TEKES helped to cement Finland’s position as a leader in global innovation, demonstrating its worth as a pillar of the country’s entrepreneurial ecosystem.

Meanwhile, in Malaysia…

Looking back over the past few weeks in Malaysia, I believe there is a missing message in the national conversation. No one is discussing why every country needs to get ready for an innovation-driven future. The job market is about to be drastically disrupted by the advent of AI, automation, and robotics. There will be unheard challenges for people all over the world, not the least of which is the shrinking job market, combined with the overburdened public sector in many nations around the world and the threats of climate change.

Entrepreneurship is key to creating jobs and sustaining in the face of job insecurity, climate displacement, geopolitical tensions, and technological disruption.

Of course, private capital is the ideal driver for innovation. But, based on Securities Comission Malaysia data, early-stage investing has retreated in Malaysia between 2011-2021, while in Finland it grew from US$ 112 million in 2011 to US$ 1.2 billion by 2021.

Sometimes, private capital is too risk-averse, so the government or government linked investment funds need to fill the gap until the ecosystem is stabilized. Nascent ecosystems don’t play by the same rules as developed ecosystems, hence initiatives like Khazanah Dana Impak, Khazanah’s Jelawang Capital venture capital fund of funds initiatives as well as Kumpulan Wang Persaraan ( Diperbadankan ) ( KWAP )’s Dana Perintis ( RM500 million for venture capital funds and direct investments ) and Dana Pemacu ( RM6 billion for private equity ) are critical to provide badly needed growth funds for startups across various stages.

Yes, early-stage investing is risky, and there will be some failures. In light of the changes that our world and the world’s community are facing, the risk of not investing is even greater. So in times like this, we need to be armed with strong ambition, infectious positivity and resourceful execution. I can only say that I think Malaysia is on the right track and that it will take less time to mature than Finland.

Mohamed” Mo” Tarek El-Fatatry is the Soonicorn Collective’s founder, the host of the Soonicorn Nation Podcast, and the founder of ERTH.

Dr. V Sivapalan contributed to the article. He has a Ph. D in Venture Capital from University of Edinburgh, Scotland, is Co-Chairman of Soonicorn Collective and Adjunct Professor in the School of Science and Technology, Sunway University. He is the author of the book Supercharge Your Startup Valuation. Visit his website for more of his writings.

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Indian immigration is great for America – Asia Times

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The innovative MAGA coalition has actually had its first inner debate, and it’s over H-1b permits. It started when Trump&nbsp, appointed&nbsp, Sriram Krishnan, a previous Twitter executor and Andreessen Horowitz lover, to be a top AI plan consultant.

Krishnan has been a outspoken supporter of qualified immigration. This angered some right-wing activists, including an anti-immigration group calling itself” US Tech Workers“, as also as&nbsp, Laura Loomer, &nbsp, Charles Haywood, and other&nbsp, MAGA ranters:

Different numbers on the Tech Right, including&nbsp, Elon Musk, &nbsp, David Sacks, and&nbsp, Joe Lonsdale, gamely stood up for Krishnan and for the thought of high-skilled multiculturalism in general:

A great fight ensued&nbsp, on X, which has essentially become the in-house chat room for the National right. Far-right trolls ( including the pathetic but persistent “groypers” ) jumped in to attack Indians as a group, and Indians jumped in to defend themselves.

However, more philosophical debate shifted to the H-1b card, which — though not the same as the green card concern that Sriram was talking about — has become a focus point of right-wing pushback against high-skilled immigration.

The disputes over high-skilled immigration, American immigration especially, and applications like H-1b are closely related — extremely so, in fact. &nbsp, Most H-1b workers are Hindu, and Indians&nbsp, render up a plurality&nbsp, of foreign-born STEM employees. American workers have become far more essential than Chinese employees to America’s proper high-tech industries:

Source: EIG

And although Indians are now&nbsp, the second-biggest group of foreign-born residents &nbsp, in America ( behind Mexicans, of course ), they are also the most successful by many measures — their&nbsp, median household income&nbsp, far exceeds that of any other group. 1

And Indian Americans are now&nbsp, influential&nbsp, also beyond STEM and the technical world— for instance, in elections. Vivek Ramaswamy is assisting in the new Department of Government Performance, and Ash Patel has been chosen to lead the FBI.

Yet Vice President JD Vance’s woman is Indian! Although Indian Americans also lean a little toward the Democrats on average, they ‘re&nbsp, becoming more properly split&nbsp, between the parties — there are &nbsp, a large number of Indians on the right&nbsp, today, despite the presence of another party of the right that doesn’t specifically like Indians.

The debate over skilled immigration is therefore only one more discussion about the rapidly expanding role of Indian and Indian-Americans in the US elite. But first, let’s talk about skilled immigration on its own merits.

H-1b workers are beneficial for American tech workers in general and for American workers in particular.

First, let’s point out that skilled immigration overall is very important and good for America. America will lose if you force the world’s best talent to play for the other side, according to Elon Musk. Here are two Noahpinion posts ( here and here ) that lay out the case pretty exhaustively.

In fact, the American people pretty strongly agree. A recent&nbsp, Pew poll&nbsp, found that an overwhelming majority of Americans place a priority on letting in highly skilled workers:

Other&nbsp, polls&nbsp, find&nbsp, the&nbsp, same thing.

But H-1b is a little different. Technically, the H-1b is a “nonimmigrant” visa — you can only work in the U. S. for six years before returning to your home country. In practice, many H-1b workers apply for employment-based green cards while they’re here, which is one reason why people casually refer to H-1b as “immigration”, but it’s really a guest worker program.

The question is whether those visiting employees harm American tech workers.

You would be led to believe otherwise by the lobby group” US Tech Workers.” It is an affiliate of Kevin Lynn’s Institute for Sound Public Policy, a political pressure group, and does not represent any organization of actual US tech workers. &nbsp,

Lynn has about 2.5 years of experience working in the tech sector, and he hasn’t shown any signs of ever having done the kind of work an H-1b worker might be hired to do.

Even his cofounders have a limited amount of experience in the tech sector. So it’s just a nativist group that claims to represent a class of workers that it doesn’t actually represent, on the premise that American workers are harmed by the presence of foreign workers.

But does that theory still hold any water? The idea behind the influx of foreign labor is that it will help to boost the supply of tech workers. When supply goes up, price goes down — that’s Econ 101.

Now, I often remind readers that immigration&nbsp, as a whole&nbsp, doesn’t seem to decrease&nbsp, native-born American wages. And that’s true — immigrants don’t just work, they also buy stuff, and that increase in demand roughly balances out the increase in supply. But in a specific sector, immigration definitely&nbsp, could&nbsp, decrease wages for the native-born.

If you attracted a lot of STEM workers, they could lower the cost of their labor while their demand for local goods and services raises wages in other sectors. In this case, American labor&nbsp, as a whole&nbsp, wouldn’t be affected, but American STEM workers would get the short end of the stick.

Interestingly, thought, this doesn’t seem to happen in practice! Because the H-1b program uses a lottery system, we can create a very effective randomized natural experiment that can demonstrate how the H-1b program affects the fortunes of businesses by comparing the companies whose applicants win with those whose applicants lose.

On top of that, there have been occasional changes in the&nbsp, total&nbsp, number of H-1b visas, so we can also look at the results of those policy changes on companies that are more dependent or less dependent on H-1b workers.

Any way you slice it, it doesn’t look like H-1b workers hurt the native-born, even when they seem to be in direct competition:

    Mayda et al. ( 2017 ) &nbsp, found that when national H-1b numbers were restricted, employment for similar native-born workers didn’t rise.

  • Mahajan et al. ( 2024 ) &nbsp, found that companies who won the H-1b lottery didn’t hire fewer “H-1b-like” native-born workers. They come to the conclusion that “lottery wins enable firms to scale up without causing significant substitution for native workers.”
  • Kerr et al. ( 2015 ) &nbsp, find that when companies successfully hire more H-1b workers, they employ more skilled native-born workers than before.
  • Peri, Shih, and Sparber ( 2015 ) &nbsp, look at the city level instead of the company level, and found that “increases in STEM workers are associated with significant wage gains for college-educated natives”. This should ease worries about hiring H-1b workers and outperforming those who employ mostly native-born Americans.

And so on. It is possible to&nbsp, find papers that conclude&nbsp, that H-1b workers displace similar native workers, but they’re few and far between. 2

How are these results possible? One possibility, put forward by Mayda et al., is that H-1b workers and native-born workers just do very different jobs, so there’s a “low degree of substitutability”. Similar to the claim that immigrants take jobs that native-born workers can’t or won’t do, this is also true.

But I think there’s another force at work here: &nbsp, industrial clustering. It’s a well-known fact that companies in knowledge industries— tech, finance, entertainment, biotech — tend to cluster together in cities. Why? When you have an area with a lot of high-skilled labor, high-tech companies will find it easier to hire everyone they need in that area, so they’ll pour investment into that location.

Silicon Valley is still a leader in the IT sector despite the Bay Area’s prohibitive costs and dysfunctional governance because it is where all engineers reside, so businesses want to invest there.

At the country level, the same is true. If America weren’t home to so many talented software engineers, for example, the tech industry would be much more reluctant to invest there. Because of their talent concentrations, companies move to San Francisco and Palo Alto, where it would be relatively easy to sell software from Bangalore or Hyderabad.

Thus, H-1b workers could actually be reinforcing America’s overall advantage as the place where high-tech companies want to invest. Naturally, this increased investment benefits native-born tech workers as well.

In fact, there is some evidence for this theory. &nbsp, Glennon ( 2023 ) &nbsp, shows that when companies are prevented from hiring H-1b workers, they start investing in other countries instead:

How do multinational firms respond when artificial constraints, namely policies restricting skilled immigration, are placed on their ability to hire scarce human capital? …]F ] irms respond to restrictions on H-1B immigration by increasing foreign affiliate employment…particularly in China, India, and Canada. The most impacted jobs were R&amp, D-intensive ones …]F ] or every visa rejection, ]multinational companies ] hire 0.4 employees abroad.

Similar studies conducted at the city level would be interesting to observe the effects of more H-1b residents residing in a particular area. However, this proof strongly suggests that H-1bs “hire them here or hire them there” effect. American tech workers won’t gain if investment dollars are spent abroad rather than staying in the US.

Also, &nbsp, Dimmock et al. ( 2018 ) &nbsp report that startups that successfully employ H-1b workers are much more likely to experience a successful exit. Startup failures pretty obviously don’t benefit native-born US tech workers.

And, of course, there are plenty of startups that&nbsp, wouldn’t even exist&nbsp, without founders who used H-1bs to get into the country, not to mention the&nbsp, beneficial discoveries&nbsp, that&nbsp, wouldn’t have been made&nbsp, ( or at least, not in America ) without H-1b researchers.

In other words, Elon is exactly right about this:

In fact, Elon should know — he worked in America&nbsp, on an H-1b visa in the 1990s.

( Side note: People should be less likely to accept the” Evil Elon” theory given that Elon has been so pugnaciously insistent here rather than rolling over for the MAGA base like some other tech folks did. Calling for more skilled immigration, even in the face of right-wing rage, is a very pro-American move. )

Of course, none of this means that the H-1b program is perfect. In fact, there are &nbsp, at least two reforms that basically everyone realizes would be good. The first is to make H-1b visas transfer more quickly, so that foreigners can move from job to job more quickly without losing their visas. However, it’s probably not nearly as severe as some people believe. &nbsp,

Mithas and Lucas ( 2010 ) &nbsp, find that once you control for observable determinants of skills, H-1b workers actually get paid&nbsp, more&nbsp, than similar American workers, not less. That means they’re generally not being forced to do the same job as a native-born worker for lower cost, as some allege.

Implementing a minimum wage for the H-1b is the second and more crucial reform. Right now, some of the available visas get snapped up by&nbsp, low-productivity service-outsourcing companies&nbsp, for low-level employees, instead of being used to hire very high-productivity engineers, managers, etc. That must end, and the only way to do this is to grant H-1bs to employees who will receive high salaries.

Of course, increasing the overall cap on H-1bs would also greatly help this issue. Somehow, I don’t believe the vehement critics of that H-1b program would want to do that.

Anyway, the overall point here is that the H-1b program is good on the economic merits — not just for US companies, but for their high-skilled employees as well. However, after reading the numerous days of the right-wing backlash against skilled immigration on social media, I’m not so sure whether the program’s merits or even the country’s economic fortunes are really what they are trying to say.

Sadly, tweets like this have been common:

As so often happens, I believe the conflict we’re having here is a fight between America’s cultural and racial identity, which some people find it difficult to discuss in terms of its economic impact.

The MAGA backlash against Indians is awful.

Over the past two days, I have seen a lot of tweets like this from right-wing X users:

Of course, as you can imagine, the comments from pseudonymous rightists were more vicious toward Indians.

The animosity toward Indian immigrants, in particular, is something I’ve seen with increasing frequency on the nativist right over the past few years. Here’s what University of Pennsylvania law professor Amy Wax&nbsp, said in 2022:

” Here’s the problem”, she said. They are taught that they are superior to everyone else because they are Brahmin elites, but on some level their nation is a” sore.” They now realize how far we have outgunned and outclassed them. … They feel anger. They feel envy. They feel shame. It results in ingratitude of the most abominable kind.”

And these bigoted attitudes could be spilling over somewhat into&nbsp, everyday society:

We discover that 31 % of Indian Americans think that discrimination against people of Indian descent is a major issue in the country, whereas 53 % think it’s just a minor issue. One in two Indian Americans reported being subjected to some form of discrimination over the previous 12 months, according to data from surveying respondents ‘ lived experiences with discrimination.

The rightists who denounce Indian Americans on social media believe that we must choose between an atomized society where cohesion is sacrificed on the altar of higher GDP and a cohesive nation with strong social ties bolstered by bonds of common heritage. They believe that by excluding people who aren’t of America’s noble founding stock, we can restore civic trust, stop people from “bowling alone”, and so on.

This is abject fantasy. Something like this might make sense in a country like Japan or Sweden, where there is a sense of homogeneity that has been established over the years and where large immigration waves are not. But the United States has been an immigration-fueled polyglot since its very founding.

No sooner had British Americans created the country than it was inundated by Irish Catholic immigrants, causing vast&nbsp, anti-Catholic backlashes&nbsp, and&nbsp, efforts at large-scale deportation. When tensions started to escalate in the late 19th century due to the large-scale arrival of Italians, Poles, Jews, and other East and South Europeans, these had barely subsided. Today’s anti-immigrant freakout is the third since the founding.

So if you decide to try to strip down America’s population to its founding stock, who will you include? Do the Italians have a place to stay? What about the Vietnamese refugees who arrived in Vietnam in the 1970s? Are the Irish part of America’s core population, or papist interlopers? What about Mexican Americans with Mexican ancestry in the 1930s? Where do you draw the distinction? What about a person who appears completely Asian but has an ancestor who navigated on the Mayflower?

When you peel back the layers of an onion, there is nothing left until you reach the center by looking for an ethnicity that represents the” true” or” core” American stock.

Any attempt to ethnically purify America will in reality just turn the country against itself; the debates over Indian immigration on X this week will serve as a model for our daily lives. Imagine spending the entire day wondering if the US government will declare your ethnicity to be peripheral to the American national project if you found dealing with awake people calling you a white supremacist at work in 2018 annoying.

Naturally, you would fight hard to ensure that your ethnicity made it into the circle the purifiers eventually created. Thus, daily life would be reduced to racial conflict.

Americans do not want this. &nbsp, Yes, a majority voted for Trump, but it was not because they thought he would racially purify the nation. In fact, his victory was driven pretty much entirely by&nbsp, defections of Latinos and Asians&nbsp, from the Democratic coalition. It’s doubtful that those swing voters believe Trump to be an ethnic cleansing agent.

And I predict, pretty confidently, that Trump&nbsp, won’t &nbsp, be an ethnic cleanser in his second term. He flirted slightly with the idea with&nbsp, his” Muslim ban” but ultimately backed off. There was, and is, simply no national appetite for converting America to an ethnostate. Just a few right-wing activists are posting their Indian coworkers’ social media accounts.

In the old days, when I was growing up, we used to simply call that sort of thing “racism”, and thus exile it from polite society. Behind that taboo were&nbsp, centuries of history&nbsp, of contentious nation-building and self-definition. We have seen that a polyglot nation can’t always consider who are the country’s true” sons of the soil” or becomes paralyzed by conflict.

Now, after the 2010s, “racist” is such an overused insult that it’s applied toward basically anything. Social media created a zone of opportunism where anonymous teenagers clawed for status by constantly&nbsp, finding new innocuous things&nbsp, to call “racist”, while progressive activists&nbsp, devalued the term&nbsp, by&nbsp, trying to apply it too broadly.

This wrongfully defied the authority of the word by emphasizing the kind of people who post messages on social media and claim that Indian doctors and CEOs are a bunch of third-world nutcases who will pollute the blood of our country. So yes, all the racist racism against Indians that is currently being poured out of right-wing circles is coming from a number of racist racists, but merely acknowledging the fact is no longer enough to stop it.

But at least some people on the new Tech Right are &nbsp, now realizing&nbsp, what kind of tiger — or perhaps, &nbsp, leopard&nbsp, — they’ve chosen to ride. For a reason, the 2016 Trump movement had a reputation for being full of racial-nationalist bigotry; it might have been exaggerated, but the New York Times newsroom staffers had created a progressive fantasy.

Now, if you’re a tech founder who backs Trump and spends the day online on X, your daily routine includes your so-called political allies calling for the deportation of your Indian friends, cofounders, and employees in large numbers.

Well, such is politics. Meanwhile, in the real world, Indian immigrants and their descendants are hard at work making America an even better place, and I would very much like them to continue.

Notes

1 In terms of per capita income, they are slightly behind the Taiwanese, who have smaller households.

2 It’s also not too hard to&nbsp, write down a theoretical model&nbsp, in which H-1b workers displace the native-born. However, these models only have the best of the assumptions that are made, and they don’t typically include things like clustering effects. In general, when you have theory vs. high-quality data in economics, go with the latter.

This&nbsp, article was first published on Noah Smith’s Noahpinion&nbsp, Substack and is republished with kind permission. Become a Noahopinion&nbsp, subscriber&nbsp, here.

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Mosti unveils Startup ASEAN, bridging ecosystem gaps across region

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  • Empower companies, connect innovators, and develop a growing ecosystem
  • Startup-friendly policies, improve ecosystem readiness, generate effective collaboration

Norman Matthieu Vanhaecke, Group Chief Executive Officer of Cradle with Chang Lih Kang, minister of Science, Technology and Innovation at the soft launch of Startup ASEAN.

The Soft Launch of Startup ASEAN, a platform that aims to position ASEAN members as key players in the global startup landscape, was announced by the Ministry of Science, Technology, and Innovation ( MOSTI ) and Cradle Fund Sdn Bhd. The program was officiated by Chang Lih Kang, secretary of Science, Technology and Innovation, during the Malaysia-China Summit 2024 held next week

Startup ASEAN is inviting companies and habitat lovers from all ASEAN nations to meet the system forward of its official release in Q2 2025. Companies can now register their attention at website. startup-asean. nonprofit and be part of the state’s second jump in innovation.

Cradle has been given the task of leading the ASEAN Startup Initiative ( ASI) within the ASEAN Technology Startup Ignite as Malaysia prepares to take office of ASEAN in 2025. This initiative highlights Malaysia’s commitment to bolstering the regional startup ecosystem, aligning with the nation’s Priority Economic Deliverables ( PEDs ) 2025 for Science, Technology, and Innovation (STI).

The program aims to promote startup-friendly policies, promote habitat preparation among ASEAN member states, and encourage meaningful collaborations to foster regional synergies and partnerships.

The second program under the ASEAN Technology Startup Ignite is a program curated by a work force from all 10 ASEAN Member States: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Chang Lih Kang, Minister of MOSTI, emphasised,” Business ASEAN is designed to encourage and promote science, engineering, and innovation within the ASEAN startup ecosystem, serving as a gateway to the vivid ASEAN startup community. Through this program, we aim to empower companies, connect entrepreneurs, and develop a growing ecosystem that drives provincial growth and innovation”.

Describing Startup ASEAN as more than just a digital system, Chang added,” It is a testament to our collective responsibility to nurturing creativity, strengthening engagement, and building a solid foundation for modern advancement”.

Norman Matthieu Vanhaecke, Group Chief Executive Officer of Cradle, said,” As Malaysia’s primary level company for the company habitat, Cradle is pleased to direct Startup ASEAN. This system serves as a catalyst for regional cooperation and creativity, enabling startups to grow and promote sustainable economic growth in the area.

Through a phased approach, he said Cradle will introduce dynamic programmes, including regional hackathons targeting deep tech sectors such as Artificial Intelligence ( AI), sustainability, and climate tech. Also, the Startup ASEAN Summit in 2019 will highlight regional innovation and open up new markets for startups.

” The establishment of Startup ASEAN under Malaysia’s Chairmanship is a significant step in strengthening the region’s vibrant startup ecosystem, which currently boasts over 11, 000 startups and an ecosystem value of US$ 131.2 billion ( RM589.1 billion ). With ASEAN’s GDP projected to reach US$ 4.5 trillion ( RM20.2 trillion ) by 2030, the region remains a dynamic hub for innovation, offering vast opportunities for companies and investors alike”, said Satvinder Singh, Deputy Secretary General for ASEAN Economic Community.

” Startup ASEAN may be essential in connecting tech companies across the region, empowering members, enriching the ecosystem, and bridging ASEAN’s local and global network with the complete support of all 10 associate state”, said Dr Kanchana Wanichkorn, Director of Sectoral Development Directorate for ASEAN Economic Community.

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Sunway, Ministry of Higher Education sign 3-year TVET MoU to produce industry-ready graduates  

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  • Collaboration offers jobs for southeastern Malaysia’s TVET individuals
  • Partnership emphasises training to increase knowledge &amp, market readiness

Senior director of competency at the Department of Polytechnic and Community Colleges, Razak bin Sabtu (left) and Sunway Group’s chief HR Officer, Foo Shiang Wyne post signing.

Sunway Group and the Ministry of Higher Education ( MOHE ) have signed a three-year technical and vocational education and training ( TVET ) memorandum of understanding ( MoU) focused on skills sharing, industrial training programmes, and human capital development.

Sunway stated in a statement that the partnership will provide internship opportunities to TVET students from Malaysia’s southern region in collaboration with Ibrahim Sultan Polytechnic ( PIS ) under MOHE’s Department of Polytechnic and Community Colleges.

Implementation of structured business training programs that aim to advance students ‘ practical skills and prepare them for changing market demands is a key component of this partnership.

More than 200 TVET individuals across the country have benefited from Sunway’s ongoing collaborations with Universiti Teknologi MARA, the National Youth Advanced Skills Training Institute, and different polytechnicnics and community colleges to time. Additionally, the business expanded its commitment to advanceing technical and vocational training by offering internship and skill-sharing opportunities to other common TVET institutions.

Sunway Group key HR official, Foo Shiang Wyne, expressed trust in the relationship. We think that this MoU will help us produce a capable workforce that meets industry requirements. Sunway is dedicated to providing PIS students with top-notch professional training and opportunities for talent development.

Senior director of competency at the Department of Polytechnic and Community Colleges ( JPPKK), Razak bin Sabtu, highlighted the collaboration’s importance. ” This relationship demonstrates JPPKK’s dedication, alongside PIS, to provide graduates with skills that correlate with business demands. Sunway acts as a strategic partner, expanding the scope of our alumni ‘ employment options and facilitating work assignments.

Sunway members, senior representatives from MOHE’s Department of Polytechnic and Community Colleges, and PIS also attended the signing ceremony. This partnership is a major step in bolstering relations between academia and industry to enhance Malaysia’s development of human capital.

The MoU aligns with Sunway’s broader efforts to boost Malaysians through training and coaching across five key industries: kindness, cooking, facilities and equipment upkeep, mechanical, and healthcare. It also supports the Malaysian government’s increased focus on vocational education, reflected in Budget 2025’s allocation rise from US$ 1.5 billion ( RM6.8 billion ) to US$ 1.7 billion ( RM7.5 billion ).

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Yoon’s martial law stunt may cost Korea a lost decade – Asia Times

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Yoon Suk Yeol, president of South Korea, set his country’s economy back ten centuries in six days, and increased the chances that the following ten years will be lost.

The government’s urgent request to remove Yoon’s resignation and impeachment for his crazy martial law declaration later on December 3 is the focus at this time. When the dust settles, nevertheless, the actual collateral damage will be to Asia’s fourth-biggest business.

On Monday, the day before Yoon’s determined stunt, South Korea was now carrying serious existing conditions into a 2025 some Seoul policymakers despair. Between China’s decline and Donald Trump’s coming trade conflict, South Korea’s business may find itself in harm’s way first and often.

Record household debts, which is putting strain on consumer spending, complicates the way forward. Additionally, South Korea has a gender pay gap and a labor-intensive workforce that prevents technology.

Korea’s fertility level is the lowest everywhere. A handful of family-owned conglomerates, or chaebols, continue to dominate the market, making it hard for start-ups to grow and destroy the government’s export-driven development model.

And the monetary system needs major changes to end the” Korea cheap” that underestimates Kospi index prices.

Problem is, Yoon’s antics really proved traders doubting Korea’s eagerness for global night right. His government is now even more in the lame-duck area than it was three days ago, also if Yoon can prevent being impeached — a great “if.”

It’s difficult to imagine how Yoon will survive this unless something else is dropping that we haven’t already discovered,” says Eurasia Group scientist Jeremy Chan.

As ideal as we can tell, Yoon’s martial law campaign was motivated by his disappointment with opposition parties that are stymieing his plan. The issue was considerably worsened by Yoon. Hope all-out gridlock today.

This new complication in Seoul elections appeared to be apparent to The Bank of Korea. Straight after Yoon declared martial law, BOK Governor Rhee Chang-yong pledged “unlimited cash” to calm industry. On Wednesday, he set up an urgent meeting to discuss how the BOK may protect the market from further political scheming.

” From a near-term plan aspect, apart from the market problems, doubt could also come in the event of government changes”, says Goldman Sachs scientist Goohoon Kwon. On Thursday, Defense Minister Kim Yong-hyun resigned.

According to Bank economists, in the best-case situation,” the negative effects to the economy and financial industry may be short-lived as uncertainties on the political and economic environment may be quickly mitigated on the back of strategic policy response.”

However, Moody’s Ratings ‘ economist Anushka Shah adds that a “prolonged period of political conflict that affects economic activity and leads to work stoppages would be credit negative.”

The significance of the Korean victory, both for domestic politics and the external sector, is a key climax. The domestic political unrest will only exacerbate the bearish sentiment surrounding the Korean victory, but Alvin Tan, a currency strategist at RBC Capital Markets, believes that the growth slowdown and potential US-China trade war in the coming year will continue to be the main drivers.

A wiser leader than Yoon might have examined his mediocre approval rating and adjusted his policies accordingly. Or create new ones that might appeal to voters and opposition parties. Instead, Yoon threw a tantrum, leaving many of Korea’s 51 million people wondering if Yoon’s support rate is way too high.

Yoon also spewed a dose of Trumpian skepticism by warning of “anti-state” militias sympathetic to North Korea’s plot against him. Not a wise choice from a leader who makes Shigeru Ishiba and Joe Biden the most well-known Americans in the world right now.

This was” an act of political desperation”, Chan says. ” It wasn’t about North Korea or social order — despite Yoon’s claims”. In the end, Chan adds, Yoon was” trying to bring all legislative proceedings to a halt” by calling on the National Assembly.

The issue is that South Korea’s government functions are squandering up at arguably the worst possible time. Along with China exporting deflation, Seoul is bracing for US President-elect Trump’s coming tariffs. Trump has threatened that the 60 % tariffs against China could be the start of a global arms race.

Trump has telegraphed 100 % taxes on automobiles made in Mexico. Car-making giants in Korea and Japan worry — for valid reasons — that they’re next.

Concerned about the fates of Hyundai, Kia and others, Yoon has been scrambling for a meeting with Trump. In a bid to get a Mar-a-Lago tee time, Yoon dusted off his golf clubs for the first time in eight years.

Yoon’s government even hired the lobbying firm Susie Wiles, the incoming White House chief of staff, worked for. The Washington embassy of Korea hired Mercury Public Affairs to build connections with the incoming White House, according to Korean media.

Trump, of course, is less of a bridge-builder than a geopolitical wrecking ball. Still, Yoon has studied up on former Japanese Prime Minister Shinzo Abe’s Trump bromance.

Abe became the first world leader to hurl a long way to New York’s Trump Tower to kiss the ring in November 2016. The stunt also caused Abe to sit next to Trump at Group of Seven meetings and other global confabs, earning him a spot there.

If Yoon looked closer, he’d see how little the late Abe got in return for his subservience. Trump ignored Abe’s pleas and still abandoned the Trans-Pacific Partnership trade pact, a cornerstone of Japan’s effort to contain China.

Abe’s acquiescence didn’t earn Tokyo a pass on the Trump 1.0 trade war. Trump continued to try to shake down Abe for US$ 8 billion in annual payments to keep American troop levels in Japan. It didn’t stop Trump from palling around with Kim Jong Un, legitimizing North Korea’s murderous regime at the expense of Japan‘s national security.

Yet Trump 2.0 is just one of South Korea’s biggest economic challenges. The other is how the economy is bouncing off course because of its already-existing circumstances.

The first half of Yoon’s five-year term did little to raise Korea’s economic game. He’s done little, if anything, to level playing fields to help small-and-medium-sized companies grow into larger ones.

He hasn’t made any discernible progress in lowering the nation’s crippling debt, increasing worker productivity, empowering women, and raising the average income.

Yoon hasn’t been able to dispel MSCI’s reservations about Korea Inc. Yoon argued in a uniquely assertive way earlier this year that the world’s largest index company should establish South Korea as a developed nation, a designation that would entice tidal waves of global capital into won-denominated assets.

Back in March, Yoon pledged to scrap outdated regulations, loosen limits on corporate ownership, strengthen capital markets, increase currency-trading hours, boost transparency and even tolerate short sellers.

MSCI went away unimpressed. According to its analysts,” these efforts will be subject to consultation with market participants once in effect,” as they stated in June. In other words, Team Yoon needs to carry out the Big Bang without resorting to a supply-side explanation.

Unfortunately, Yoon is only the most recent leader to talk a lot of money-savings and talk little. Like his five predecessors over the last 20 years, Yoon quickly realized the difficulty and risk of clashing with Korea’s chaebol-industrial complex and demurred.

This persistent complacency comes at a high price. In any tally of major economies courting a&nbsp, Japan-like lost decade&nbsp, through complacency and political distraction, &nbsp, South Korea&nbsp, deserves a primary place. Yoon, part of this sad continuum, also let the BOK run the show.

So did Moon Jae-in, who was elected in 2017 to restore faith in the Korean economy. Moon began with a bold plan to champion” trickle-up economics”. Higher corporate taxes were included in the plan to better distribute wealth and employment opportunities.

The strategy spearheaded by Margaret Thatcher, Ronald Reagan, and Abe decades earlier had a reversed impact due to Moon’s emphasis on enriching the middle class. Yet Moon, too, saw the magnitude of the task of taming Korea Inc&nbsp, &nbsp, — and he backed off.

The same was true for Park Geun-hye, president from 2013 to 2017. Not only was she Korea’s first female president, but also the daughter of former national leader Park Chung-hee, who built the chaebol-led model that still dominates today back in the 1960s and 1970s.

Park Geun-hye took office with grand plans to dismantle her father’s economic system. She talked of devising a more” creative” model of entrepreneurship and shifting&nbsp, tax incentives&nbsp, toward startups.

Park planned, too, to strengthen antitrust enforcement&nbsp, and penalize big companies for hoarding profits that could be used to boost paychecks and fund new cutting-edge research and development.

Her father’s export-driven development strategy placed a premium on loans to domestic businesses and shielded domestic industries from global competition. The strategy borrowed from the” Asian tigers” playbook Japan had written.

Of course, Park Chung-hee’s legacy is back in the news this week. The upheaval that occurred at the time of his 1979 murder occurred at the same time as a previous declaration of martial law.

Over time, Korean officialdom was captured by the home-growth giants Park&nbsp, Chung-hee’s policies created. But once daughter Park Geun-hye settled into the presidential Blue House, 38 years after her father’s assassination, she too decided change was too difficult and risky.

Rather than upending the chaebol system, Park got co-opted. By 2017, she was &nbsp, impeached and jailed&nbsp, in a scandal involving Samsung leader Lee Jae-yong. Both have since been pardoned, much to the dismay of many Korean voters.

Before Park, Lee&nbsp, Myung-bak, president from 2008 to 2013, &nbsp, pledged to generate more economic energy from the ground up. Voters hoped that, as a former CEO of Hyundai Engineering&nbsp, and Construction, Lee had the know-how to shift growth engines away from exports toward domestic demand. Lee demurred, siding with the chaebols that produced him.

If only these leaders had swayed the wind in a significant way, Korea might not be struggling to raise its prices and compete in the era of China. Even if Yoon manages to cling to power, somehow, his odds of elevating the economy to greater heights in the 887 days he’d have left in office are slight, at best.

What Yoon has accomplished is placing South Korea in the shoes of Asian martial law enforcers in a manner that international investors won’t find appealing. These include Indonesia, Myanmar, the Philippines, Thailand – and now South Korea.

Yoon reassured markets about the Korean discount while also bringing up a past Kospi investors would prefer not to think about, such as 1948 martial law episodes.

One silver lining:” The swift reversal of the martial law underscores the resilience of South Korea’s institutions”, write analysts at BMI, a Fitch Solutions Company.

We anticipate only temporary effects for the economy and financial markets as the Bank of Korea and the Ministry of Finance have responded quickly by reassuring investors, according to BNI. Notably, the central bank has pledged to increase short-term liquidity and take steps to stabilize the FX markets, which is in line with our opinion that the risks associated with the South Korean victory should be kept under control for the time being.

Perhaps, but the effects of Yoon’s insane and selfish act may make South Korea worry about where and how all that potential was lost in a decade.

Follow William Pesek on X at @WilliamPesek

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Trump tariffs potential death knell for Japan automakers – Asia Times

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Somewhere in the world, probably Beirut, Carlos Ghosn is having a severe case of sadness.

The Nissan-Motor-CEO-turned-international-fugitive is seeing stock plunge 47 % during the recent CEO’s five-year career. Makoto Uchida also lost more than 100 percent details to Japan’s Topix score. He’s then Nissan’s worst-performing president since at least 1974.

But Nissan’s slip isn’t happening in a suction, as Japan’s another engine giants can speak.

In 2019, the business was still reeling from Ghos n’s arrest on financial misconduct charges and escape. Nissan and its Japanese competitors are now facing a worldwide market shakeup caused by the growth of China.

Or, as Michael Dunne, CEO of automobile industry advice ZoZoGo, calls it, the “great China vehicle blitzkrieg”. According to Dunne,” the unexpected flood of Chinese cars is upending years of steady market securities and profits.”

As Donald Trump enters the White House to start off trade war, China Inc. is becoming even more of a goal. Chinese manufacturers are under increasing pressure due to a precise explosion in competition from China, particularly in the field of energy vehicles.

The Volt manufacturing acceleration process has been at best slower. Has Japan Inc. CEOs ‘ pressure on the nation’s long-dominant hybrid car market shifted to EVs and loosened their hand?

” China may export a spectacular 6 million vehicles to more than one hundred countries this month, cementing its status as the country’s No 1 producer”, Dunne says.

The typical price of those made-in-China cars: US$ 19, 000. ” That’s less than half the regular price of a new vehicle in America and Europe”, Dunne adds. Customers in all time zones are switching to new Chery, MG, Changan, and BYD models instead of Chevys, VWs, and Hondas.

If not for Trump’s returning to the scene 48 time from now, Chinese EVs eating Japan’s meal would be problems much. The US president-elect has hit the ground running by enacting transfer taxes on both China and Canada.

Trump’s inclusion of neighbors in his price list is shocking Tokyo and Seoul. One big concern is Trump’s plan to impose 100 % levies on vehicles made in Mexico ( and, presumably, on Canada too ).

As Trump results to business, his “revenge” journey is sure to start in Asia. That has leaders at Toyota, Honda, Nissan, Hyundai, Kia and some bracing to levies of similar scale heading Asia’s manner. Auto-production-heavy markets like Thailand also may be in harm’s way as global supply chains go astray.

Tesla businessman Elon Musk has Trump’s hearing as the next trade war develops, thinning the story. Earlier this year, Musk warned that Chinese Vehicle areas are destined to have” important” achievement outside China.

Musk claimed in January that” the Chinese auto companies are the most competitive car companies in the world.” According to the statement,” I believe they will have a major achievement outside of China depending on the establishment of taxes or trade barriers.”

But, he added, “frankly, I think, if there are no industry restrictions established, they will very much dismantle most various companies in the world”.

In the months that followed, Musk has attempted to refute those sentiments. Apparently, someone in the Shanghai place reminded Musk of Tesla’s sprawling manufacturing presence there, where he built his first outside” Plant”.

Musk’s close relationship with Trump — including a position as authorities efficiency advisor— muddies the issue. How Musk manages to compromise his position in Trump World with an economy that Tesla heavily relies on, one that Tesla relies on.

Some argue that Musk’s level – and position in Trump World – may help Tesla engage in China via-a-vis contemporaries.

Tesla “has the scale and scope that are unmatched in the EV industry, and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled with likely higher China tariffs that will continue to dethrone cheaper Chinese EV players ( BYD, Nio, etc. )” from flooding the U. S. business over the forthcoming times”, says Dan Ives, an analyst at Wedbush Securities.

There is nothing scientific about where all this leads, though, in Japan, where the country’s economy is still reeling from decades of excessive monetary easing.

Japanese Prime Minister Shigeru Ishiba has been frantically trying to meet with Trump since his shock victory on November 5. But to no cost. So much, Trump World has refused to grant Ishiba a Mar-a-Lago market.

Ishiba hopes that by forming a specific relationship with Trump, Japan Inc. will suffer less collateral harm. It’s what former Prime Minister Shinzo Abe did during Trump’s 2017-2021 president.

Abe became the first earth president to jump to Trump Tower in New York to love the ring in November 2016, just weeks after Trump’s victory in the election. But other than garnered worldwide headlines, the prank did little good.

Trump continued to withdraw from the Trans-Pacific Partnership, which was started by the US. Abe had pressed Trump to be on the TPP, which was the foundation of Tokyo’s efforts to encircle China.

Nor did Abe’s beauty offensive win Tokyo a slip on the Trump 1.0 taxes. Trump, however, palled around with Kim Jong Un in way that upheld North Korea’s brutal government at the cost of Japan’s national security. Trump humiliated Abe by revealing that the Chinese president had nominated him for the Nobel Peace Prize, adding insult to injury.

But there’s another reason Ishiba may perform Trump 2.0 quite carefully: the interpersonal US leader’s wish for a “grand bargain” with Xi.

Trump government takes, including Scott Bessent as US Treasury director, argue that this is the end game. Today’s risks of large tariffs, they argue, are only a negotiating strategy aimed at prodding Beijing to flex to US needs.

Japan’s issue is that it would be looking into any diplomatic Group of Two trade offer from the outside. Chinese EV industry would be the main beneficiaries of any such agreement.

That, of course, would be the same of President Joe Biden’s plan of shutting Chinese Vehicles out of the US business with 100 % fees.

Trump claimed on the campaign trail that “large companies are only being built across the border in Mexico” by China to make vehicles to offer in the US market. Our folks will man those flowers, and those plants will be constructed in the United States.

The vegetables Trump may employ to encourage China to construct US factories remain ambiguous. But the stick if China Inc doesn’t post could be 200 % tariffs, Trump has warned.

Where does this leave South Korea and Japan, in my opinion?

Now, it’s clear Foreign EV makers are on a break. By the time they were a month quick, BYD, Leapmotor, and Xiaomi already had their yearly delivery goals crossed. What’s more, BYD, Xpeng and Zeekr saw record quarterly sales in November.

BYD, for instance, delivered 504, 003 passenger cars in November and 500, 526 in October. Its full-year sales for passenger vehicles presently hit 3, 740, 930, exceeding the week’s 3.6 million goal.

Leapmotor, which is backed by Stellantis, saw 40, 169 deliveries in November, up 5.2 % from October and a whopping 117 % year on year. As competition in China heats up, Tesla has had to slash Model Y prices by 10, 000 yuan ( US$ 1, 371 ) to 239, 900 yuan ( US$ 32, 000 ).

At the moment, Chinese automakers are playing catch-up in the EV area and boosting purchases. That’s regardless of what becomes of Trump’s business conflict or his pledge to eliminate Biden’s$ 7, 500 return on EV payments.

Toyota, for instance, is building a great power shop in the US state of North Carolina”. We plan for the long term, but political considerations aren’t a factor in how we approach product creation or investment opportunities,” says David Christ, vice president of Toyota North America.

Yet Japan Inc. is bleeding global market share. A new analysis by Bloomberg economists found that Japanese automakers saw the biggest market share losses of any peers between 2019 and 2024 in China, Indonesia, Malaysia, Singapore and Thailand.

How China is gaining from those losses can be written in bold font between the lines. It’s likely they’ll strengthen that push,” says Bloomberg Intelligence senior auto analyst Tatsuo Yoshida of China’s ambitions.

Even the sales and output of the much-vaunted Toyota appears&nbsp, to have plateaued. All six of the main Japanese automakers that Bloomberg Intelligence has tracked have consistently ceded ground. In Thailand and in Singapore, where Japanese carmakers long enjoyed strong customer loyalty, market shares are down to 35 % from 50%-plus in 2019.

In 2023, China dethroned Japan to become the world’s top automaker. The devastating blow to Japan’s collective psyche was the worst since China overtook Japan in terms of GDP in 2011.

However, the ways that Chinese automakers managed to capture Japan’s nap continue to surprise economic historians. It’s not just autos. Efforts to generate more tech” unicorns,” for example, didn’t gain the traction Japan’s government expected. Even today, Japan trails Indonesia in the race to generate US$ 1 billion-plus valuation startups.

As the EV market expanded, Japan’s persistent obsession with hybrid vehicles reflects this same pattern. Granted, the slowdown in US demand for EVs has many auto analysts believing Japan’s dual-track approach has merit. At least temporarily.

Yet Toyota officials and their Japanese counterparts are in fact aware of their errors when they dismiss the EV future as being in view. Toyota is catching up on older models. Japan’s top automaker is tripling EV output as it chases China’s BYD, which in 2023 surpassed Musk’s Tesla.

The question, of course, is whether it may already be too late as Tesla, Detroit, Germany and China beat Toyota to the market”. No one,” says advisory ZoZoGo’s Dunne”, can match BYD on price. Period. Boardrooms in America, Europe, Korea and Japan are in a state of shock.”

Of course, Trump’s trade war could complicate the outlook considerably. This is especially important because no one is sure whether Trump will strike a deal with Xi’s China or instead impose tariffs.

For now, Cigdem Cerit, an analyst at Fitch Ratings, sees a” neutral outlook for the global automotive sector, “reflecting” our expectation of a stable production environment, with global light vehicle sales projected to increase by about 2 %.”

But Cerit adds”, the growth will be unevenly distributed across regions, as European and Chinese markets face macroeconomic challenges. We expect pricing to remain subdued due to escalating competition.”

For Japanese chieftains like Nissan’s Uchida to those at Toyota, the threat from China’s auto industry isn’t to be taken lightly. Nor does the upcoming US government work with China Inc. or support its replacement.

Follow William Pesek on X at @WilliamPesek

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Cyberview, Futurise launch National Drone Sports Roadmap

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  • Drone Hub positions Cyberjaya as a hub for drone sports, talent & industry
  • NADSAR guides Malaysia’s drone sports growth through talent, partnerships & regulations

Najwan Halimi officiated the Drone Hub Innovation for Future Talents (DRIFT) and simultaneously launched the National Drone Sports Strategic Roadmap

Cyberview Sdn. Bhd., together with its subsidiary Futurise Sdn. Bhd., hosted the Drone Hub Innovation for Future Talents (DRIFT) event, showcasing Malaysia’s commitment to advancing drone innovation and talent development. The event featured the announcement of the Cyberjaya Drone Hub, the unveiling of the National Drone Sports Strategic Roadmap (NADSAR) 2023–2027, and the launch of the Cyberjaya Drone Hero (CDH) programme.

The Cyberjaya Drone Hub, an initiative by Cyberview, is designed to establish Cyberjaya as a thriving drone ecosystem built on key pillars such as drone sports development, community engagement, talent cultivation, commercial opportunities, and industrial growth. With facilities like the Drone Testing Zone (DTZ) and testbeds, the hub fosters innovation and collaboration. Since 2019, the DTZ—supported by Drone Academy Asia, one of the first CAAM-approved Remote Pilot Training Organisations (RPTO)—has trained over 2,300 remote pilots, conducted more than 150 training sessions, and logged over 2,000 flight hours, cementing Cyberjaya’s leadership in Malaysia’s drone sector.

A highlight of DRIFT was the unveiling of NADSAR 2023–2027, an initiative by Futurise via the National Academy for Drone Sports Excellence (AKSADRON). This roadmap serves as a blueprint for Malaysia’s growth in drone sports, emphasising talent cultivation, industry partnerships, and regulatory enhancements. It aligns with the government’s Visi Sukan Negara 2030, advancing both emerging sports and technological innovation.

Speaking at the event, Cyberview, Futurise launch National Drone Sports Roadmap Abdul Samad, CEO of Cyberview Sdn. Bhd. (pic), underscored DRIFT 2024’s significance in advancing Malaysia’s drone ecosystem. “Cyberjaya has been at the heart of Malaysia’s digital journey since the MSC days, evolving into a thriving ecosystem for technology, talent, and innovation. Today, we are proud to take another step forward, solidifying Cyberjaya as Malaysia’s Drone Hub.”

The Cyberjaya Drone Hero programme, a collaboration between Cyberview and he Cyberjaya Drone Hero programme, a collaboration between Cyberview and Futurise through AKSADRON, was introduced as a core initiative of the Cyberjaya Drone Hub. Focused on developing talent in drone sports, the programme provides hands-on training, competitive opportunities, and exposure to advanced technologies. By aligning with NADSAR’s objectives, it equips students and drone enthusiasts with STEM skills while encouraging participation from schools and universities nationwide. To date, the programme has trained over 200 students from 14 academic institutions, including SMK Cyberjaya, Sekolah Seri Puteri Cyberjaya, Politeknik Banting, Universiti Teknologi Malaysia, and Universiti Tun Abdul Razak.

During the event, two Letters of Intent (LOIs) were exchanged to strengthen Malaysia’s drone technology and talent cultivation efforts. The first LOI was signed between Cyberview and Drone Academy Asia, and the second between Futurise and UMPSA Advanced, a subsidiary of Universiti Malaysia Pahang Al-Sultan Abdullah, supporting AKSADRON initiatives.

Beyond industry innovation, DRIFT 2024 seeks to engage local communities by raising awareness about drone sports and fostering a tech-savvy culture. Schools, universities, and stakeholders are encouraged to drive grassroots participation, creating excitement and ownership in this emerging field.

“As we move forward, Cyberview is committed to creating an inclusive and dynamic drone ecosystem. Through today’s engagements, let’s spark new ideas, collaborations, and inspiration to build a future that thrives on innovation and talent,” said Kamarul Ariffin.

The collaboration between Cyberview and Futurise reflects a unified effort to advance Malaysia’s technology ecosystem. Through initiatives such as the Cyberjaya Drone Hub, NADSAR, and the Cyberjaya Drone Hero programme, Cyberview is building a dynamic ecosystem that bridges industry and community through sports, positioning Malaysia as a global leader in drone innovation and technology.

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SME spending signals growing confidence among APAC Businesses: Instarem SME Spend Barometer

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  • SMEs are turning to online resources, AI, to tackle rising prices &amp, increase productivity
  • Malaysia &amp, Australia travel IT assets, with F&amp, B, IT &amp, technology solutions seeing biggest increases

SME spending signals growing confidence among APAC Businesses: Instarem SME Spend Barometer

Instarem, part of Nium, Southeast Asia’s payments unicorn, launched its 2024 SME Spend Barometer, revealing insights into the spending behaviours of small and medium-sized enterprises ( SMEs ) in Singapore, Australia and Malaysia. &nbsp,

Based on data from a test of 700 SMEs and some subjective interviews with customers, Instarem’s annual SME Spend Barometer record analysed spending patterns from January 2023 to August 2024, highlighting how SMEs are carefully investing in technology, infrastructure, and talent to react to an evolving financial landscape.

A determined method to growth
Trade payments increased by 6 %, indicating a meticulous yet positive outlook for global growth, thanks to Malaysia and Australia. In comparison, trade payments to Singapore decreased by 27 % year over year, indicating that local companies may be shifting their attention away from home goals in the face of rising costs and financial pressures. &nbsp,

Ashish Sangle, world Nose of Instarem, said:” Instarem has supported thousands of businesses in their development journeys over the years. Expanding internationally allows SMEs to gain access to wider user bases and exploit market opportunities for scale and growth. In today’s culture, a little caution is natural, but we anticipate that SMEs will continue to look for and exploit opportunities that are in line with their objectives.

Embracing AI and robotics
As evidenced by a 29 % increase in spending on data services over the same time period in 2023, the implementation of AI and digital change is accelerating across APAC. Malaysia and Australia are leading the charge in IT investments, with sectors like F&amp, B ( 120 % ), IT and software services ( 66 % ), and business consultancy ( 59 % ) registering the biggest gains. &nbsp,

In order to reduce rising costs and increase efficiency, several SMEs who were interviewed for the record are using AI, automation, and online tools. They are adopting process technology, AI-driven fraud detection, and advanced data analysis, among other alternatives to simplify businesses, minimise regular work, and optimise resources.

However, not every industry is embracing tech at the same rate, with financial services and business services cutting their information services spending by 42 % and 4 %, respectively.

SME spending signals growing confidence among APAC Businesses: Instarem SME Spend Barometer

Return to work picks up speed
SME employers in all three markets are reinvesting in physical infrastructure following years of hybrid or remote work, as evidenced by the 16 % increase in office expenses. Sectors like retail and wholesale, as well as business services, have seen office expenses rise by nearly 150 % and 70 %, respectively, suggesting a shift in how businesses are positioning themselves for long-term growth. This rise in commercial real estate demand also accounts for the more than doubled transaction volumes for real estate and leasing between 2023 and 2024.

These patterns are not universal, and some industries, like those in industrial manufacturing and construction (-48 % ), online retail (-44 % ), and telecommunications (-28 % ), are bucking the trend in favor of a more cautious strategy driven by market needs. &nbsp,

Our decision to invest in physical office spaces in Vietnam and the Philippines has been influenced by employee demand for in-office collaboration. By balancing these investments with our offshoring model, Net Fusion Technology’s group managing director George Votava said that while promoting greater collaboration and innovation, the company can better manage costs. &nbsp,

Balancing talent and growth
Despite broader economic pressures, SMEs are n’t scaling back on talent investments, with salary payments up 7 %. In Singapore, salary investments stayed flat, with some sectors, including media and marketing ( 13 % ) and business services ( 3 % ) even increasing their spending on third-parties ( external advisors ) to drive growth. This suggests a strategic shift to increase internal teams without significantly enlarging the field.

According to the country’s Wage Price Index and the 3.7 % increase in the National Minimum Wage, salary payments among SMEs in Australia have increased modestly ( 3 % ), indicating that businesses are placing a premium on retaining key talent while managing costs. &nbsp,

What’s ahead
These findings demonstrate that SMEs are putting their weight on high-impact investments, such as digital transformation, while using measured tactics elsewhere. Resources are still being put under pressure, though, due to challenges like fluctuating exchange rates and high processing costs.

” Managing costs is a top priority for SMEs, particularly in critical areas like talent and expansion”, said&nbsp, Sangle. ” Thinking strategically about payments can free up important resources for growth and prepare SMEs for long-term success,” according to the statement” not only help to reduce high cross-border fees and improve cash flow.”

For more insights, download Instarem’s 2024 SME Spend Barometer Report here.

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