Pakistan’s government announced a set of financial measures in January aimed at restarting its faltering economy. The government has proposed a series of tax cuts for investors participating in the stock market as well as for small and medium-sized businesses (“SMEs”). These measures are aimed at creating growth such as through the reduction of the corporate tax rate from 49% to 20%. Other measures announced include the removal of a high rate of tax on non-banking financial institutions. Mr Khan’s government has reached out to its citizens living overseas in an attempt to raise USD1.0Bn in a bond issuance to prop up its foreign reserves. It is anticipated that if the country successfully raises this capital, it may be able to avoid a bailout from the International Monetary Fund.
Southeast Asia’s largest economy recorded a trade deficit of USD8.9 Billion in 2018, indicating a significant shift in the country’s fortunes after it posted a USD11.8 Billion trade surplus in 2017. As Indonesia’s major trading partners are seeing growth slowdown due to the US-China trade war, it is now seeking alternative markets for its exports. Indonesia’s President, Joko Widodo, has aggressively targeted African and Middle Eastern countries as potential markets to take advantage of these growing Islamic economies, which are expected to be worth over USD3.7 Trillion by 2023. Whilst China will always be a competitor as an exporter, Indonesia hopes that its shared identity with Muslim-majority countries will help it secure trade deals.
Focus Industry: Coworking Spaces
At an estimated 14,411 units globally as of March 2018, coworking spaces have disrupted the traditional office segment, according to a report by AllWork, a workspace news provider. Coworking spaces are favoured due to their flexibility in office contracts and networking-friendly environments, which are features that appeal to freelancers and start-ups in particular. Metropolises such as London, New York and Chicago are considered global hubs when it comes to coworking space and these cities are experiencing an average annual growth rate of 20%. This growth is not only confined to Western regions. Australia experienced growth of 297% in the number of coworking spaces from 2013 to 2017, whereas Asia Pacific saw an increase of 150% from 2014 to 2017.
WeWork, the world’s largest coworking company, has embarked on an aggressive expansion in Southeast Asia. In November 2018, WeWork opened sites in the Philippines and Vietnam with a plan to open more in Malaysia and Thailand. WeWork has committed USD500.0MM to its expansion into South Korea and other countries in the region to meet the demand for coworking space.
JustCo, a Singapore-headquartered coworking provider backed by the Government of Singapore Investment Corporation (“GIC”), is planning on entering new countries including South Korea and Australia in 2019 as part of its growth plans. JustCo has also been able to leverage off its relationship with GIC to secure prime locations for its offices such as the Seoul Finance Centre, a downtown skyscraper owned by Singapore’s sovereign wealth fund.