Building a legacy - East Ventures' vision and commitment to ASEAN's flourishing future
East Ventures


8 September 2023


Building a legacy: East Ventures’ vision and commitment to ASEAN’s flourishing future

Amidst global economic challenges, the ASEAN region stands out as a symbol of strength and adaptability. Holding the title of the world’s fifth-largest economy, ASEAN boasts impressive numbers: a combined GDP of US$4 trillion, a population of 650 million, over 70 million small and medium-sized businesses, and a potential to grow its economy by US$200 billion. This remarkable growth is powered by its large population, forward-thinking trade policies, and a stable political environment, leading to a rapid increase in the region’s overall wealth.

In 2024, ASEAN’s economy is foreseen to grow 4.5%, higher than the global economy. The region’s inflation is also manageable. ASEAN countries can maintain their interest rates and currency depreciation. These facts show that the region has resilience from the global shock. ASEAN’s economic growth keeps becoming a ‘bright’ and ‘rare’ spot amidst the global market. Therefore, ASEAN will be the epicentrum of growth.

Echoing the ethos of East Ventures Summit 2023, “Prudent and Confident into the New ASEAN growth,” we firmly believe that ASEAN’s vast demographic and infrastructural foundation positions it to thrive amidst geopolitical instability.

In alignment with this vision, East Ventures is actively involved with the ASEAN Business Advisory Council (ASEAN-BAC) Indonesia 2023, focusing on two out of five priority programs: Trade and Investment Facilitation and Sustainable Development. These programs are strengthened with legacy projects to ensure their enduring impact in the future. 

East Ventures has embarked on roadshows and events across ASEAN nations since February 2023 to materialize this vision. Notably, Roderick Purwana, Managing Partner at East Ventures, spearheads as the Policy Manager for Investment Facilitation at ASEAN-BAC Indonesia. Concurrently, David Fernando Audy, Operating Partner at East Ventures, serves as the Legacy Lead for Investment Facilitation. At the same time, Avina Sugiarto, Partner at East Ventures, holds a dual role as a member in the ASEAN-BAC Program Priority: Sustainable Development Priority and Carbon Centre of Excellence Program.

ASEAN Trade & Investment Facilitation program

The Trade & Investment Facilitation programs seek to harmonize intra-regional trade and enhance the intra-investments between ASEAN countries.

The ASEAN has successfully eliminated most tariffs within its member states. However, “trade transactions cost,” which includes the costs of adhering to each state’s trade policies, remains a significant hurdle. At borders, these costs and delays in the cargo clearance process highlight the urgent need for trade facilitation. This involves streamlining processes and demands domestic reforms to enhance customs administration and ensure transparency in trade regulations.

Non-Tariff Measures (NTMs) pose a significant challenge. Intended to ensure product quality, they can become burdensome when poorly designed, acting as concealed trade barriers. The rising number of NTMs and inconsistencies in their implementation across member states complicate ASEAN’s trade scenario. Recent events, like the signing of the Regional Comprehensive Economic Partnership (RCEP) and the challenges of the COVID-19 pandemic, underscore the importance of smooth trade flows and the need for ASEAN to address these challenges promptly.

Every ASEAN member state must prioritize trade facilitation at the governmental level to boost regional trade. The established interagency body, such as the National Trade Facilitation Committee (NTFC) and Focal Points should be active, empowered, and oversee trade-related agency collaboration. Implementing this requires training for all trade stakeholders, emphasizing the public-private partnership. Trade facilitation also includes advanced risk management and digital capabilities.

Trade facilitation has three main elements:

  1. Procedure streamlining
  2. Digital technology application
  3. Information transparency

Customs should be facilitative, with special provisions for certain goods. All trade processes should be digital, and information should be shared promptly. Monitoring trade costs, like release times, is essential. International cooperation, like document exchanges, can further enhance trade facilitation.

Below is a framework for countries to evaluate gaps and prioritize reforms.

Framework for developing the policy priorities for trade facilitation

Framework for developing the policy priorities for trade facilitation (Source: ASEAN Business Roadmap Towards Epicentrum of Growth)

The ASEAN Economic Ministers (AEM) meeting directs relevant ASEAN bodies to create a trade facilitation and NTM work plan for priority sectors by December 2024. This plan should be nationally developed with ASEAN-BAC and NTFCs, including specific commitments and timelines. Progress should be reported in the respective sectoral meetings.

In terms of investment, the ASEAN region experienced significant foreign direct investment (FDI) fluctuations over the past two years. In 2019, the region witnessed its highest-ever inflows of US$182 billion, making it the top FDI recipient in the developing world. However, the subsequent year, marked by the COVID-19 pandemic, saw a 25% decline in FDI to US$137 billion. This drop was attributed to factors such as lockdowns, supply chain disruptions, economic uncertainties, and the postponement of investments by multinational enterprises.

Despite the challenges, ASEAN’s resilience was evident as it remained an attractive investment destination. The region’s share of global FDI even increased from 11.9% in 2019 to 13.7% in 2020. A notable trend was the growth of intra-ASEAN investment, which rose from 12% in 2019 to 17% in 2020, reaching US$23 billion. This growth underscores the potential of fostering more intra-ASEAN collaborations. 

Strategies to boost intra-ASEAN investments include regulatory alignment across member states, investment promotion through networking events, and capacity-building initiatives. These efforts aim to benefit ASEAN’s Mid to Small Medium Enterprises (MSMEs) by providing them with expanded market access, resources, and financial support.

  • Regulatory alignment with harmonized frameworks and policies across ASEAN countries to simplify investment processes. 
  • Investment promotion and networking can be achieved through forums, trade fairs, and business matchmaking events. 
  • A robust information-sharing mechanism can help identify potential investment opportunities.  
  • Capacity-building initiatives can enhance the ability of ASEAN countries to attract and manage investments. 

For ASEAN’s Mid to Small Medium Enterprises (MSMEs), intra-ASEAN investments offer numerous benefits, including expanded market access, supply chain integration, access to resources and technologies, and financial support. The overarching goal is to ensure that ASEAN MSMEs can leverage these benefits to enhance their competitiveness and achieve sustainable regional growth.

“Our ambition is to strengthen ASEAN enterprises, including startups, corporations, and investors, by championing three strategic agendas: reforming legal and regulatory framework, closing funding gaps and de-risking market and business risks, and promoting network and collaboration of ASEAN companies across different ecosystems,” Roderick explains.  

ASEAN Business Entity to offer advantages to businesses operating in ASEAN

The Trade and Investment Facilitation working group established the ASEAN Business Entity (ABE) legacy project to bolster intra-ASEAN investment by offering advantages to businesses operating in the region, such as regulatory simplification and streamlined procedures. 

The initial move is to recognize and endorse deserving businesses from ASEAN for the ABE status. Fostering the ABE and promoting its presence across ASEAN nations is aimed at boosting cooperation and fostering a robust economic partnership among member countries.

Therefore, many stakeholders must be involved in the ABE project, including public actors, ASEAN member states, ASEAN corporations, ASEAN and global tech players, and venture capital (VC) firms to collaborate within the ASEAN investments ecosystem. Their collective efforts drive economic integration, facilitate investments, and support the development of a vibrant and competitive ASEAN region.

Stakeholder ecosystem

Stakeholder ecosystem (Source: ASEAN Business Roadmap Towards Epicentrum of Growth)

The legacy members are designing and mapping the indicators, defining the qualifications criteria, and providing incentives to make it more appealing. The legacy member has set the roadmap to identify the ABE definition by the end of 2023, formulating incentives for intra-investment and announcing 20 ASEAN companies to be labeled ABE by the end of 2024.

Accelerating the green economy transition through Sustainable Development initiatives

ASEAN-BAC 2023 is dedicated to driving a comprehensive shift towards a green economy, creating an environment that supports ASEAN’s energy transformation, and utilizing the ASEAN Taxonomy for eco-friendly financial solutions.

This initiative aligns with our pledge to reach net-zero emissions by 2060 for Indonesia. Alongside this, we passionately support the Carbon Center of Excellence legacy project. “This center is a hub for knowledge and shared best practices, equipping ASEAN businesses with the expertise to understand and plan within the carbon markets effectively,” Avina explains. 

As a member of the Sustainable Development program priority and Carbon Centre of Excellence legacy project, Avina also thrives on developing a common understanding and framework for the net zero goal, supporting sharing knowledge and best practices on nature-based solutions and carbon trading in their respective markets.

Promoting Indonesia to ASEAN and the world

East Ventures is honored to be the Gold Sponsor of ASEAN-BAC, co-host, and participate in the sideline and flagship events in ASEAN-BAC Indonesia 2023. We proudly presented the Climate Impact Innovations Challenge (CIIC) 2023 Grand Finale on 2 September in Jakarta as one of the sideline events of ASEAN Business & Investment Summit (ABIS) 2023 with the selected 12 finalists representing four tracks: Renewable energy, Food and Agriculture, Mobility, and Ocean. Four selected startups from each track become the winners in the CIIC 2023: AfterOil from the Renewable Energy track, Qarbotech from the Food and Agriculture Track, BaNiql from the Mobility track, and Waste4Change from the Ocean track. In addition, Waste4Change also receives a US$70,000 investment from CIIC Investor partner Rumah Group. 

CIIC is Indonesia’s largest climate innovations tech platform of the year, presented by East Ventures and Temasek Foundation. The platform provided opportunities for tech innovators to showcase their sustainable innovations in addressing ecological challenges and mitigating the impacts of climate change with a total prize pool of IDR 10 billion to pilot their solutions within Indonesia and be granted access to investors, other perks, and benefits.

On the same day, Avina Sugiarto spoke at the ASEAN Climate Forum, and David Audy spoke at the ASEAN Investment Forum. Both are the sideline events leading up to the ABIS 2023. Avina shared knowledge about the private sector’s role in nature-based solutions. 

“As a venture capital, we are committed to investing in more and more climate innovations in the region. As we are a home ground in Indonesia, we want to start work with local founders in Indonesia and ASEAN because we believe these local founders know the market. You know that there is a huge risk for climate change in ASEAN. We do feel the urgency, and more and more founders are passionate about climate change and coming out with many innovations,” Avina said. 

Meanwhile, David emphasized the investment opportunity in electric vehicles (EV) in ASEAN members by providing examples of Indonesia and Thailand. Both countries are the readiest in ASEAN in building the EV ecosystem regarding technology, capacity, capital, regulation, and taxation. 

“Thailand has over six decades of experience in automotive production, especially Internal Combustion Engine (ICE). Indonesia recently built its electric vehicle, ICE capacity, and battery processing facility. Going forward, rather than competing with each other, I think Indonesia and Thailand can find ways to collaborate, not only for both countries but also we can find ways to collaborate with all ASEAN member states, where all the countries will participate in terms of components and other auto parts,” David said. 

During the ABIS 2023 on 3 and 4 September in Jakarta, Roderick became a moderator and David presented the legacy ABE project in the “Investing in ASEAN: Opportunities in the World’s Most Dynamic Market”. The ABIS 2023 was attended by 1,200 onsite delegates and staffers from ASEAN countries and online participants worldwide streaming through the ASEAN-BAC YouTube channel.

East Ventures is committed to fostering a productive and healthy Southeast Asia for today, tomorrow, and more generations to come, through its investment and initiatives, including Indonesia PASTI BISA (IDPB). IDPB has been significant in helping thousands of health workers and societies to get medical aid and to the government to strengthen Indonesia’s healthcare system. Indonesia’s Ministry of Health also uses IDPB Safeguards Oxygen’s platform to distribute 1,600 oxygen concentrators from other institutions. Thanks to its agility and velocity in repurposing the capabilities and uniting the tech ecosystem, East Ventures is nominated at the ASEAN Business Awards 2023 by the ASEAN Business Advisory Council in the Health Resilience and Trade & Investment Facilitation pillars. Previously, IDPB was also awarded by the Ministry of Health of the Republic of Indonesia for tackling the COVID-19 pandemic at the PPKM Award on 20 March 2023.

“As a Southeast Asia-focused venture capital firm, we are always prudent and believe in the growth of ASEAN. Through our active involvement in ASEAN-BAC Indonesia 2023 and other East Ventures initiatives in climate solutions, the health industry, entrepreneurs, and investment in the digital sector, particularly in Indonesia, can promote Indonesia as one of the leading growth countries in ASEAN, which will positively impact ASEAN advancement to the next level for prosperous and sustainable future generations,” Roderick Purwana closed.