WILD GEESE: Paul ScalesProperty investor, Bangkok
BANGKOK-BASED DUBLINER Paul Scales believes positioning Ireland in Asia ahead of the competing markets within the euro zone is a real challenge these days, but he says Irish companies continue to thrive in the region.
Lessons learned from countries such as fast-growing Thailand can offer solace to Ireland at a time of economic difficulties, he adds.
“Thailand has grown up since the financial crisis of 1997. The export sector has matured and now Thailand can rub shoulders with everyone in the region. It is probably the leading economy in the ASEAN grouping with the exception of the city state of Singapore,” he says in an interview at the Bangkok Sports Club, in the heart of the capital.
In some ways, discussing Thailand as a model can seem ironic. Just over a year before we spoke, this very part of Bangkok was the scene of deadly clashes between Red Shirt supporters of exiled Thai premier Thaksin Shinawatra and the government.
However, Thailand seems to be able to thrive despite political upheaval. Its economy grew by 8 per cent last year, and prospects are upbeat given the stability that has followed the recent election of Thaksin’s sister, Yingluck Shinawatra, as prime minister.
Scales worked with Jones Lang Wootton (JLW) in Dublin after he left Trinity College in the 1980s, and had planned to return to his father’s property firm in South Frederick Street after gaining some experience with JLW in London and Dublin. “Out of the blue an opportunity came up to join JLW in Hong Kong. Hong Kong was a fascinating place to be in the 1980s. The British had already announced their withdrawal from the territory, which was to follow in 1997. There was a feeling of needing to make money before the music stopped. It was my first experience of the ‘capitalist greed bug’ that was to spread throughout the western world though globalism in the years that followed,” says Scales.
It was also a particularly fertile environment for a young person in real estate, and led to Scales becoming a partner in JLW at 32.
He opened the Bangkok office that expanded into a firm with more than 150 people within a few years. He left JLW in 1996, shortly before the Asian financial crisis, which offered him a respite in Ireland and time to reposition himself for the recovery in Asia.
Since then he has originated and invested in businesses involving all types of real estate in Asia and Europe. “Currently the focus is on Asia and in particular the warehousing and distribution sector in Thailand, where there is much opportunity for growth. The Irish Chamber of Commerce in Thailand, and the Asia Pacific Irish Business Forum, are keen to create a conduit for Irish companies which want to expand into Asia.
“Also, we seek foreign direct investment into Ireland. Enterprise Ireland and the IDA have some great people in Asia, but not enough of them. Our ambassadors also do a fantastic job to support us, but we need more support in the form of more diplomatic missions with commercial personnel across the region, Thailand being a case in point. The demographics and potential are mind-boggling and we ignore it at our peril.”
Thailand has no Irish embassy and is handled out of Kuala Lumpur in Malaysia, which, given the strong tourism links, can at times seem strange.
“We Irish have some great success stories across the region that seem to happen by accident rather than design and are dependent on the entrepreneurial flair of the individuals involved. We have emigrated as individuals and not as corporations, which puts us at a great disadvantage to our bigger neighbours in Europe,” he continues. Retaining Ireland’s individual identity within the enlarged Europe both home and abroad is essential.
“In Thailand the European Union has recently established the European Asian Business Centre with over €2 million of funding to facilitate European businesses through a policy of advocacy. This will surely be focused on big business and will facilitate European multinationals to gain a greater foothold in the Thai market,” Scales says.
A small number of leading Irish companies have come to Thailand and been successful, most notably Kerry Group. Others such as Wisetek Solutions from Cork and Carbery Group are set to arrive. There is potential for Irish firms to replicate in Asia the strategic relationships they enjoy in Ireland with US and European firms.
“In Wisetek’s case they came to Thailand to service EMC, with whom they enjoyed a special relationship in Cork. This is not job shunting, but developing existing relationships to create more jobs and more revenue. I would urge all manufacturers and service providers to think along these lines,” says Scales.
Finding a job in Asia is not all that easy, unless you are already working for a multinational and the opportunity arises to relocate internally, and there are barriers such as immigration restrictions and work permit issues. The old way of being in the right place at the right time is the best way to succeed. “To be in the right place it necessitates going there and knocking on doors,” he stresses.
