Brunswick ISMEA Quarterly Newsletter - May 2017

India, Southeast Asia,
Middle East & Africa Group
QuarterlyNewsletter
Volume3
May
2017

2
Table of contents
2
Bringing the outside world in
Highlights from Brunswick Insight’s Perspectives research
Motoring ahead
Car manufacturing as a barometer of Africa’s rising middle
class
Upcoming Events
The ISMEA Team
6
8
9
4
12
14
16
17
18
Singapore
RegTech rises
Middle East
Hubs emerge
Africa
Market dynamics matter
India
A FinTech race
Focus on Financial Technology:
How can Africa live up to its potential?
An interview with international trade expert Catherine Grant
Makokera
Brunswick Exclusive:

3
This is the May 2017 edition of the
India, Southeast Asia, Middle East
and Africa (ISMEA) Group Newsletter,
a quarterly roundup of news and
analysis from Brunswick team
members based in the world’s most
dynamic emerging markets.
In this edition, we look at how
technology is shaping the financial
services industry. Emerging markets,
including those across the ISMEA
region, have long been hotbeds of
innovation in payments, driven by
large underbanked populations and
the spread of mobile phones.
With traditional banks and mobile
operators evolving their business
models and start-ups racing to the
market, it’s a rapidly evolving space.
Thisintroducesarangeofimplications
for commercial opportunities,
broader social and economic impact
of enhancing financial inclusion, and
regulatoryand risk considerationsthat
come with needing to protect financial
data.
Theissuealsofeatureshighlightsfrom
Brunswick’s ground breaking study
capturing the perspectives of nearly
43,000 adults across 26 markets on
business and financial, political and
social issues.
The survey revealed fascinating and
varying insights from across the
region. A common finding is that
companies today must juggle myriad
stakeholders with a wide range of
attitudes and opinions, and many of
whom hold sharply negative views
toward the business community.
Taking a look at Africa, we examine
the importance of connectivity and
international trade for tapping Africa’s
growth potential, and the rise of the
automotive manufacturing sector
as an indicator of the continent’s
expanding middle class.
We hope you will enjoy this glimpse
into key trends in the ISMEA region.
From the dynamic field of FinTech
to international trade linkages and
Africa’s automotive market, the
challenges and opportunities facing
business are vast – with smart
and informed engagement with
stakeholders required for success.
Introduction
3

India
A FinTech Race
India’smovetowardsalesscash
economyopensapaymentsbattlefield
In India, cash is king
– but it is on notice.
Prime Minister Narendra
Modi threw down the
gauntlet last November,
with an executive order
extinguishing 86% of
banknotes in circulation.
In a country where 78% of all
consumer payments by value are in
cash, PM Modi’s action amounted
to another aggressive notice of
intent to transform India by ridding
it of unaccounted, illegal wealth
and moving it towards a less cash
economy. For many of India’s array
of FinTechs, from payment apps
to digital wallets and everything in
between, Mr Modi’s intervention was
a welcome shot in the arm.
It would invigorate activity and
attention around FinTechs after a year
that saw venture capitalists apply the
brakes on funding: after a bumper
2015, investments in FinTechs more
than halved in 2016.
One fallout of the funding drought has
been that FinTechs are increasingly
collaborating with incumbents –
established banks. While some of
India’s behemoth banks have had
run-ins with a handful of their
challengers, for example, over a lack
of security on their apps, there has
been growing recognition that the
young FinTechs bring real strengths
to the table: speed and agility; passion
for product design and customer
experience; specialised young
entrepreneurial talent unencumbered
by legacy ways.
For their part, the banks have in
their armament something any
start-up would envy: scale and
reach. Banks also bring seasoned
knowledge of the consumer psyche,
rigorous compliance and back-end
processes typical of a highly regulated
environment, and the trust that
comes from their mature status.
In the battle for the millions of new
customers, the winners will be the
smartest alliances. India’s unbanked
population continues to evaporate,
down to around 133 million from
415 million in 2014 won over by
faster, simpler and more convenient
financial services through the rapid
penetration of technology, mobile and
digitization across the country.
The commercial prize aside, industry
participants also stand to gain from
the societal recognition and goodwill
that comes from contributing to
India’s development as FinTech is
increasingly recognised as a tool of
responsible growth and governance,
squeezing several decades’
development into one. This has
garnered for the FinTechs high-level
political support, benign regulation,
private capital, all packed as social
enterprise with smart solutions in the
pursuit of financial inclusion.
One such solution is India Stack, an
integrated digital architecture built
on top of India’s unique biometric
ID system or Aadhaar (meaning
Foundation). Designed by a small
army of volunteer technologists
devoted to digitising national public
services, India Stack will allow over
a billion registered citizens to store
and share personal data such as bank
statements and utility-bill payments.
This will, in turn, open up access to
a slew of additional products and
services, such as loans and insurance.
4
FinTech | Focus on Financial Technology
In India, it is now possible to make payments through the touch of a fingerprint.

5
An entire section of the population
will start to build a credit history,
which is critical as banks reverse a
historic hostility toward lending to
India’s rural poor.
The advent and swift progression
of India’s digital infrastructure has
also given way to structural reform
of its banking system, including the
introduction of new categories of
financial institutions, such as the
‘payments bank’, a stripped-down
version of a bank, reaching customers
mainly through mobile phones rather
than physical branches.
The recipients of new payment bank
licenses hail from a range of sectors,
including micro-finance, telecoms
and online payments. Along with
the introduction of government-
sponsored interoperable platforms,
such as the Unified Payments
Interface (UPI), for easier online
payments and money transfers,
India’s FinTech ecosystem now has
strong roots.
Yet for all of the strengths of these
progressively ubiquitous and
accessible services, FinTech still has
some convincing to do before there is
wholesale adoption in India.
For a start, India still has a long way
to go before it consigns cash to the
history books. While millennials – two
thirds of India’s 1.3 billion population
is under the age of 35 - will remain
immediate or early adopters of tech
innovations, India as a whole remains
a stubborn user of cash. After an
initial spike in the number of digital
payments soon after Mr. Modi’s
purge on high-value banknotes, the
volume of online transactions fell
back in the early months of this year
as old notes were replaced with new
ones. Building trust in the security of
digital transactions will be a big step in
weaning India off cash. It doesn’t help
that India has had a number of high-
profile cyber incidents.
Last year, 3.2 million debit cards
had to be blocked or recalled by
Indian banks after a data breach.
In March, Aadhaar details of MS
Dhoni, a national cricket icon, were
accidentally posted on social media by
a government bureau that facilitates
enrolment for the biometric identity
scheme. Participants across the chain,
from private sector start-ups to large
government agencies responsible for
data will need to be better prepared
for the fallout of such incidents when
they occur, and do more to educate
both employees and customers on the
steps to take to try and avoid them in
the first place.
Regulation will need to keep pace
with change. So far, the approach to
regulation has been to do as much
as possible to enable the domestic
FinTech industry to blossom,
especially in the payments space.
Other areas, such as disbursing loans,
including peer-to-peer lending, and
blockchain, are more complex and
will require firms to engage with
regulatory bodies by contributing to
consultations and industry dialogue
on the new rules necessary for
effective governance.
Finally, whether competitors
or collaborators, newcomers or
incumbents, organisations will need
to be prepared for the next innovation
or idea threatening to make them
obsolete, much like Mr. Modi’s assault
on cash.
AzharKhanisaPartnerintheMumbai
officeofBrunswickGroup.
5
Source: PwC, Government of India
India's Unbanked Population
(million)
Internet Users in India
(million)
Source: Assocham, Deloitte
Numbers at
a glance
133
million
India’s unbanked population;
down from 557 million in 2011
600million
internet users in India by 2020;
currently around 350 million
520million
Estimated smartphone users in
India in by 2020; currently around
240 million
1.1billion
Registered with Aadhaar (National
biometric identity scheme);
including 99% of India’s adult
population
$500
billion
Forecasted value
of digital payments in India by
2020, a 10x increase from 2016
Google and Boston Consulting Group.
PwC; Government of India. 135m figure presumes
every Jan Dhan Yojana (Government initiative to
bank the unbanked) account has gone to a new
user since 2015
Assocham; Deloitte
Assocham; Deloitte
UIDAI, Government of India

Singapore
RegTech Rises
Tech-basedcomplianceandregulatoryservices
growinFinTech’sshadow
In May 2015, not long after
ride-hailing app Uber had
begun gaining widespread
global adoption,TheWall
StreetJournalobserved that
the market was quickly
getting saturated with an
Uber for everything.
App makers were claiming they had
created the Uber for anything and
everything, from personal shoppers to
bartenders to even medical services.
It appears that the same is happening
with technology and FinTech now.
In the space of two years a number
of other ‘Techs’ have emerged:
InsurTech, WealthTech, and
LegalTech.
The recent addition that is quickly
gaining prominence? RegTech.
As the name implies, RegTech is
the application of technology into
compliance and regulatory services,
particularly within financial services.
The case for it appears simple and
straightforward – by automating
mundane and time-consuming
compliance tasks, human capital is
freed up and can be redirected to more
productive and strategic use.
The longer term potential is its ability
to draw insights from machine
learning and artificial intelligence,
and over time be able to anticipate
compliance issues and help regulators
nip them in the bud.
A double-barrelled boost to the
global economy
The linkages between FinTech
and RegTech have also prompted
comparisons between the two and
optimism that the latter would drive
the economy forward the same way
FinTech has in recent years.
At first glance, FinTech’s growth
performance does offer much to be
hopeful about RegTech. McKinsey
reported that the number of FinTech
companies globally stood at around
800 in April 2015; within the span of 10
months this figure rose by over 150%
to exceed 2,000. Venture capitalists
have also been quick to jump on the
bandwagon – in 2014 alone over USD
12.2 billion was invested in FinTech
firms.
FinTech has also attracted significant
attention in Asia, which recorded over
USD 1.2 billion in funding in Q3 2016,
surpassing both North America (USD
900 million) and Europe (USD 200
million) combined. If RegTech were
indeed anything like its elder cousin,
its potential would be immense.
However, prophesizing RegTech’s
potential through FinTech-
tinted glasses risks overlooking a
fundamental fact: the two are borne of
vastly different impetuses at different
ends of a spectrum.
For a start, FinTech had already been
around for a number of decades –
with PayPal being one of the more
identifiable examples – even before
its tremendous growth spurt in the
past half-decade. RegTech, on the
other hand, remains a fairly recent
development.
6
PayPal - An identifiable example of FinTech technology

7
Moreover, the growth of FinTech has
almost always been led by smaller
firms and start-ups. RegTech is at
its core a reaction to the growing
costs of compliance demanded by a
wide-range of stakeholders, including
policymakers, governments, and
a wider society that no longer trust
financial institutions as much as they
did before the global financial crisis.
Ultimately, FinTech and RegTech are
cousins who sit at the opposite ends
of a spectrum – the former driven
from the ground up by technology
firms and start-ups and the latter
from the top down by various – and
often institutional – policy-makers
and regulators. The longer-term
motivations of these stakeholders will
shape the evolution of both groups
and will therefore be very different,
even if they can immediately
appreciate and benefit from their
respective cost-efficiencies.
Force for equality
That is not to say that RegTech will
always live in FinTech’s shadow.
RegTech is viewed as a positive
equalizer for smaller firms within
the financial ecosystem, as it will
allow them to more easily comply
with the ever-increasing regulatory
requirements that larger financial
institutions are currently better
equipped to address. Academics
have also argued that the adoption of
more mature RegTech could possibly
surpass FinTech’s reach in the future,
given its applicability to a wide range
of contexts from monitoring and
environmental compliance to even
location tracking of vehicles on a
real-time basis. Nonetheless, the
broad reach of RegTech has also raised
concerns that its proliferation will lead
to widespread job displacement across
industries.
Co-existing in an automated future
There is no running away from the fact
that technology and automation will
increasingly be core to productivity
growth in the future, not just at the
level of individual businesses, but
across economies. A McKinsey Global
Institute report found that automation
could increase global productivity
by 0.8% to 1.4% annually and that
indeed, if countries were to achieve
their desired per capita GDP growth,
people would have to work alongside
machines. The study also underscored
that while some people will be
replaced by machines, displacement
will ultimately be accompanied by
the creation of new, currently non-
existent jobs.
The pressing challenge therefore,
beyond adoption, is for policymakers
to create environments that
incentivize such behaviour and
encourage the workforce to upskill
themselves and prepare for changing
workforce needs.
Singapore is particularly attuned to
this. During Singapore Budget 2015,
Deputy Prime Minister Tharman
Shanmugaratnam announced an
initiative called SkillsFuture, through
which every Singaporean aged 25
and above receives an initial $500 of
SkillsFuture Credit (to be topped up
regularly) that can be used on a variety
of courses aimed at renewing “deep
skills that are critical for the next
stage of Singapore’s economy.” The
resource-constrained nation-state is
also a keen embracer of technologies
that present growth potential for
its economy. In 2015 it established a
FinTech & Innovation Group within
its central bank and appointed a
Chief FinTech Officer. Such early
adoption and investment in FinTech
resulted in Deloitte recently referring
to Singapore as a “serious contender
for the global number one spot in
FinTech.”
JeanTanisaDirectorandOngWeiJun
isanExecutiveintheSingaporeofficeof
BrunswickGroup.
Deputy Prime Minister Tharman Shanmugaratnam

Middle East
Hubs Emerge
HowthefourthIndustrial
RevolutionaffectstheMiddleEast
As the Middle East works
to attract a greater number
of industry start-ups,
companies must clearly
communicate their work
in promoting greater
financial inclusion in a
crowded ecosystem.
Earlier this year, the Dubai
International Financial Centre
(DIFC) announced its DIFC FinTech
Hive, a platform and accelerator for
FinTech companies in the emirate.
This was quickly followed by an MoU
between Abu Dhabi Global Market
and Monetary Authority of Singapore
to develop a bilateral framework to
assist industry players, building links
between the Middle East and Asia.
Both developments reflect the pace
of change in the Middle East, and the
competition amongst the region’s
leading financial centres – Dubai,
Abu Dhabi and Bahrain – to position
themselves as the premier hub for this
new and disruptive sector.
While still in its early days, FinTech
is already having a profound impact
globally. Nearly half of all adults
globally own at least one mobile
phone, creating new opportunities
to provide financial services to
previously inaccessible consumers
in developing countries – a major
opportunity for businesses to reach
the 85 million individuals in the
Middle East who remain unbanked,
according to the World Bank.
With the MENA region home to more
than 80 FinTech startups, with nearly
30% based in the UAE, the Financial
Times recently highlights the region’s
potential for companies seeking to be
a part of this changing landscape.
Taking on the establishment
FinTech is already having an impact
on the region’s banking sector
through offering alternative platforms
for commercial and personal lending.
By addressing fundraising needs in
the region through offering newer
products and services at lower fees
with more open lending criteria,
FinTech companies are now in
competition with traditional banks for
market share.
In a recent survey by consultancy
EY, 36% of respondents stated that
up to 10% of the Gulf Cooperation
Council banking sector’s business is
at risk of being lost to stand-alone
FinTech firms in the next five years.
However, banks also see opportunities
for synergies, as 70% of participants
in the EY survey stated that the
Gulf Cooperation Council banking
sector is open to integrating FinTech
innovations that could help enhance
consumer experience and streamline
their operations.
Pros and cons
One concern about the sector is that
it may prove to be too disruptive, as
automation – which is at the heart of
many FinTech offerings – could result
in potential job losses within the
financial services sector.
Indeed, high-skilled industry
functions such as analysis,
accounting, trading and even legal
functions are becoming automated,
resulting in the elimination of some
jobs, which may be accelerated with
the rapid growth of new technologies.
However, bullish observers note that
in previous industrial revolutions,
while the introduction of new
technologies saw some jobs become
obsolete, they also created the need
for new jobs. This trend could be
replicated for FinTech, with the
introduction of new professional
services that ‘update’ rather than ‘kill’
industry jobs.
Technological disruption is nothing
new for the financial sector, as
algorithms and automation have
been used more frequently in recent
years; however, despite the increase
of new technologies, the workforces
in major financial hubs such as the
City of London and DIFC have actually
increased in recent years, according to
government reports.
Regional challenges
Challenges remain in further
developing the FinTech industry in the
region. Most notably, the Middle East
remains one of the most cash-driven
societies in the world. In the UAE
alone, an estimated US$230 billion
in payments – comprising 75% of all
transactions – are still conducted by
8

9
notes and coins, impacting the market
demand for technology-driven
financial services.
Regulation remains another hurdle,
as authorities in the region are only
beginning to formally regulate the
sector. To date, only one peer-to-
peer lender has received regulatory
approval by the Dubai Financial
Services Authority, as regulators
in Dubai and Abu Dhabi have only
gone as far as to announce proposed
frameworks impacting the majority of
FinTech companies.
Differences in laws and regulations
between (and even within) countries
contribute to a highly fragmented
regional ecosystem, impacting
companies’ ability to scale and enter
new markets.
Additionally, product demands and
user experience are vastly different
from country to country, impacting
how companies can deliver products
and services to each regional market,
making a one-size-fits-all model for
products and services unrealistic.
Communications implications
As a new industry, FinTech companies
must communicate their shared
value proposition and pre-empt any
concerns or fears that may be raised
by regulators, traditional financial
institutions, other competitors,
customers and the public in general.
As the region continues to attract
ideas and innovation in this new
sector, it is important for FinTech
players to communicate their
business, strategy and societal
benefits clearly.
JamesAllanisanAssociateintheDubai
officeofBrunswickGroup.
Brunswick outlines five communications considerations:
1
2
3
4
5
Explain your contribution to financial inclusiveness:
With the potential to serve the large unbanked and underbanked population in the Middle
East and across the ISMEA region, FinTech companies need to demonstrate the societal
benefit of their products and services. Companies must show that their purpose is beyond
corporate profit and that they are key to facilitating financial inclusion and wider positive
change.
Demonstrate alignment with government initiatives:
The influx of FinTech start-ups reflects the private sector’s alignment with many
government initiatives, such as those by the Gulf Cooperation Council governments. In the
UAE, FinTech aligns with the UAE Innovation Strategy, UAE Vision 2021, and many other
national agendas to promote economic diversification. Similarly, in South Africa, FinTech
initiatives can support the country’s transformation and economic development agenda.
Increase market education:
This is essential in raising awareness of how these FinTech products and services can benefit
consumers, businesses and the region as a whole.
Demonstrate synergies with traditional financial institutions:
The fluidity of this new sector means that new FinTech players should highlight synergies
and areas for collaboration, rather than solely focus on differences and disruption of existing
models.
Address risks:
FinTech players should proactively address issues like cyber security and personal data
protection in order to allay the fears and concerns of consumers, investors and regulations.

10
Africa
Market Dynamics Matter
Africaisnotacountry.Investorsmustdo
theirhomework
Given Africa’s combination
of low banking and high
mobile phone penetration,
there has been much
excitement about FinTech’s
potential to improve
financial inclusion across the
continent.
Investors should nevertheless do
their homework to understand the
specific trends and increasingly strict
regulations in their target markets
before making acquisitions or jumping
in with products and services that do
not take into account local dynamics.
A recent report, AfricaandtheGlobal
FinTechRevolution, by AfricInvest,
a pan-African private equity firm
with $1bn assets under management
highlights that the uptake of FinTech
will play out differently across the
continent (see graphic for trends).
AfricInvest is currently raising funds
for investments in African financial
insitutions and FinTech companies.
While the growth of FinTech will
likely be driven by partnerships or
acquisitions, mobile money models
differ across the continent.
In some countries, mobile operators
are driving change by partnering or
acquiring financial services firms.
Orange Mobile, which acquired a 65%
stake in Groupama Banque in France,
recently announced its intention to
roll out mobile savings and credit
across 18 African operations.
East African telecoms operator
Safaricom, meanwhile, has made
great strides with M-Pesa, which
according to Quartz Africa saw
transfers amounting to US$25bn in
the first three quarters of 2016. In
Zimbabwe, Econet Group’s Ecocash
model has grown strongly and now
provides customers with a MasterCard
backed by the Group’s Steward Bank,
while Zoona, a start-up mobile money
transfer venture in Zambia is also
thriving and profitable without a
banking or mobile partner. Even so,
Africa still remains a predominantly
cash-based economy.
The potential fiscal and financial
market risks associated with digital
money have seen regulators take a
cautious approach. For example, the
Kenyan Central Bank notes that the
M-Pesa model could be a “plausible
fiscal risk”, while the Nigerian Central
Bank has strict requirements for
deposit taking operators. Regulators’
concerns range from fraud and money
laundering to security of funds. In line
with their counterparts around the
world, African regulators are looking
to tighten cyber security even as
innovations around blockchain and
artificial intelligence develop.
For FinTech investors, this means
understanding their target markets
and meeting ever tighter regulations.
They need to communicate to
regulators and the wider public how
they intend to balance technological
progress with industry disruption
and disintermediation of traditional
banking and insurance services.
They must build strong reputations
and security systems to ensure that
customers will entrust them with
their money, much as if they were
a traditional bank. Furthermore, if
they can show how they contribute
to economies – through innovation,
skills transfer, job creation and taxes –
they are on to a winner.
IrisSibandaisaDirectorinthe
JohannesburgofficeofBrunswickGroup.
Africa’s three largest
economies, Egypt, Nigeria
and South Africa are
included in the global top
15 countries by mobile
penetration for mobile
subscriptions.
Source:AfricanmobiletrendsJumia.

11
The Cybersecurity dimension
The intersection of digital technology
and financial services has spawned
a thriving FinTech sector, which
seeks to change the way people and
companies save, pay, borrow, and
invest. This has the potential to
revolutionise financial services by
offering increased reach, flexibility
and innovation – at both a lower cost
and easy-to-access way. To counter
the risks around cyber security,
FinTech companies are embracing
two key technologies – blockchain
and artificial intelligence.
Blockchain
Blockchain – the “distributed ledger”
technology that underpins the digital
currency bitcoin - offers a number
of benefits to the financial services
sector. As a real-time, open-source
and trusted platform that securely
transmits data and value, blockchain
is attractive due to its potential to
enable banks to process payments
faster and more accurately, while
reducing transaction processing
costs.
Furthermore, blockchain’s
transparent, decentralised nature can
help increase security on multiple
fronts, with uses ranging from
blocking identity theft, to preventing
datatampering,andstopping“denial
of service” attacks.
Some however fear the unknown
nature of new programming code.
They point to unknown potential
vulnerabilities due to there not being
a history of specialists examining it
for flaws.
Artificial Intelligence
Artificial intelligence (AI) – which
comprises technologies including
natural language processing,
machine learning, and expert
systems – could help financial
institutions transform and
streamline some of their most
fundamental processes. Through
AI, financial institutions hope to cut
costs, spot cyberattacks and potential
fraud, improve data collection and
analytics, as well as provide better
customer recommendations.
In recent years, AI has found a
particularly useful niche in financial
regulation. Dubbed ‘RegTech’, AI can
help the financial services industry
comply more efficiently with the
burdensome task of regulatory
compliance.
The widespread adoption of AI in
the financial sector currently faces
several roadblocks. In addition to
cutting thousands of jobs, there are
also significant security and privacy
concerns linked to mismanagement,
design vulnerabilities and unforeseen
occurrences. For instance,
malfunctioning AI algorithms
may create poor quality data on
a large scale before it is detected
and remedied; this could have a
huge impact on markets. Similarly,
machine-learning algorithms
can also develop their own biases
depending on the data they analyse.
RachelChangisanAccountDirectorin
theDubaiofficeofBrunswickGroup.
Trends
Business
ModelsEnablers
Intersecting factors
• Disintermediation
• Dematerialisation
• Convergence
• Disruptors
• Blockchain
• Big data & AI
• Biometry
• Internet
• Mobile
• Regulation
• Direct Banking & Insurance
• Payments
• Lending & Insuring
• Financial Management
• Pure Technology Providers
• Mobile network operators will be
the main African disruptors
• Winning and losing business
models will differ in Africa from
other parts of the world
• Dematerialization will be much
more rapid and profound than in
other part of the world
• Despite the advance of electronic
money, Africa will remain
predominantly a cash economy
• Convergence will accelerate
• Africa will finally achieve
universal financial inclusion
Source: AfricInvest, Africa and the Global Fintech Revolution
Africa’s path in the decade
ahead

Bringing the outside world in
BrunswickInsight’sPerspectivesresearchshows
whybusinessleadersmustkeeppacewithawide
spectrumofattitudesandopinions
As President Trump’s
election and Brexit drew
many to conclude one
can no longer make safe
assumptions on how
the public views critical
financial, political and
social issues.
TheaftershocksoftheUSandUK
votesbeartestamentthattoomanyin
media,politicsandbusinessmadethe
mistakeofinterpretingrealitywithout
fullyinterrogatingtheirowncognitive
biasesandsubjectivepersonalrealities.
Tohelpthebusinesscommunity
getoutsidetheirechochambers,
Brunswickconductedanon-line
surveyofalmost43,000peoplein25
languagesacross26marketsincluding
keymarketsacrossAfrica,Asiaandthe
MiddleEast.
Ourstudy,oneofthelargestofits
kind,lookedintoglobalperspectives
ofnationalwell-being,criticalissues
facingsocietyandattitudestobusiness.
Weuncoveredfascinatingand
interestingparadoxes.
Foremergingmarketsacrossthe
MiddleEast,AsiaandAfricatheresults
areparticularlytellinggivenshifting
demographicsdrivenbygrowing
populations,mixedexpectationsof
economicgrowth,theriseofmega-
cities,burgeoningyouth,agrowing
middle-classandincreasingly
urbanisedpopulations.
Inthisarticle,wehaveidentifiedthe
keyfindingsandthemostrelevant
takeawaysfortheISMEAregion.
1. Mixed views on the world today
Ingeneral,emergingmarketsare
moreoptimisticthandeveloped
markets.Whenaskedabouthow
muchtheircountrysupportseconomic
opportunityandequalitytheUAE
(75%),Singapore(64%)andIndia
(53%)topthelistintermsofnet
support.Incontrasttotheseemerging
marketspeers,SouthAfricanshavea
dramaticallymorenegativeoutlook
withalmostathirdmoresayingthey
donotthinkthecountrysupports
economicopportunitycomparedto
thosewhodo.
Whilenet73%ofIndian,63%ofUAE
and24%ofSingaporeanresidents
believetheirchildrenwillbebetter
off,SouthAfricansareonceagainthe
outlierwithonlyanet1%feelingtheir
childrenwilldobetterthanthem–the
countryisevenlydividedbyoptimists
andpessimists.
2. Support for globalization driven by
the mega-city
Netsupportforglobalizationis
significantlyhigherinemerging
marketsthanindevelopedcountries.
Indiatopsthelistwith79%infavourof
globalization,theUAE59%,Singapore
58%andSouthAfrica41%closebehind.
Interestingly,50%ofmega-cities
residentssupportglobalizationwhile
only21%ofpeopleinsmallercitiesor
townssupportit.
12
Are we listening? Do we understand?
Business Leaders DO NOT understand challenges I face in my life
(% Agree with Statement)
68% 67%
57%
52%
69% 68% 68% 68% 68% 68% 67%
64% 63% 63% 63% 62%
57% 56%
54% 54% 53% 53% 52% 52% 51% 51% 50%
45%
43%
38%
USA
INDIA
FINLAND
MEXICO
SOUTH AFRICA
SPAIN
BRAZIL
ITALY
CHINA
AUSTRALIA
FRANCE
UK
BELGIUM
UAE
POLAND
GERMANY
INDONESIA
SWITZERLAND
SINGAPORE
NETHERLANDS
THAILAND
AUSTRIA
HONG KONG
SWEDEN
JAPAN
DENMARK
NRTH AMERICA
BRAZIL
EUROPE
AISA
Are we listening? Do we understand?
Business leaders DO NOT understand the challenges I face in my life

13
Supportforcapitalismalsovaried
amongtheISMEAregion.Indiaandthe
UAEtoppedthelistwith50%and45%
ofitscitizens,respectively,statingthey
haveafavourableviewofcapitalism.
Incontrast,only26%ofresidentsin
Singaporeand17%inSouthAfricaare
insupportofcapitalism.
3. Business has an image problem
Disappointinglybutperhapsnot
surprisingly,globalcitizensagreethat
businessleadersarenotlisteningand
donotunderstandthechallenges
peoplefaceinlife.IntheISMEAregion,
thesentimentisconsistentwithabout
ahalftotwo-thirdsofresidentsineach
India(68%),UAE(56%),Singapore
(52%)andSouthAfrica(68%)agreeing
withthestatement.
IntheISMEAregion,thesentiment
thatbusinessleadersdonot
understandindividualchallengesis
strongestinSouthAfricaandIndia
(bothat68%),whiletheUAEand
Singaporeonlyreportslightlymore
than50%ofindividualsinagreement
withthatsentiment.
4. Yet people do believe business can
make a difference
Despitethenegativeattitudes
towardsbusiness,thereiswidespread
agreementthateveryonebenefits
whenbusinessesdowell.Thisis
particularlytrueinemergingmarkets
includingtheUAE,IndiaandSingapore
wherethemajorityseebusinessas
broadlybeneficial.InSouthAfrica,
however,only29%ofresidentsagree.
Surprisinglythough,notwithstanding
thepessimisminSouthAfricaonhow
businesssuccessdeliversbenefits
SouthAfricansareoneofthebiggest
believersinbusiness’abilitytoprovide
solutionstothemajorchallenges
facingsociety.Infact,67%agree
thatbusinesscanhelpsolvemajor
challengesinthecountry.InIndiaonly
40%ofpeopleagreewhileSingapore
andUAEfallinthemiddle.
Sowhilethepeopleoftheworld
maynotfullytrustbusinessleaders’
motivestheyknowthatthesesame
businessleadersaresolution-focused
andcangenerateresults.
Globally,respondentsagreethat
businesscanhavethelargestpositive
impactintheareasof:quality
education,economicopportunityand
equality,communicationstechnology
andsafetyandsecurity.
Whenaskedonwhichissuescan
nationalbusinessesmakethe
biggestpositiveimpactcountries
intheISMEAregionrevealslightly
differentpriorities.ForIndiathetop
issueisqualityeducation,UAEsafety
andsecurityandSingaporethinks
businessescanmostpositivelyimpact
economicopportunityandequality.
SouthAfricaprioritizesquality
education,economicopportunityand
equality.
5. Where to from here
Brunswick’sresearchcomesata
criticaltime.Politicsandsociety
aregoingthroughmajorshiftsand
increasinglytheonusisonbusiness
tobeanagentforchange.Companies
haveanevergreaterresponsibilityin
society.Theyalsohaveanopportunity
todevelopsocialpurposeaspartof
theirbusinessmodels.
Buttodoanyofthiseffectively
theyneedtogetoutoftheirecho
chambersandlisten.Theyneedto
showstrongleadershipbypreparing
stakeholdersfordisruptiveforces
suchasthenewwaveofautomation,
robotsandalgorithms.Infact,our
researchfindsthatbetween10%
and23%ofemployeesbelievetheir
jobswillbereplacedbyautomation
orceasetoexistwithemployeesin
manufacturingandfinancialservices
mostlikelytoanticipatetechnological
unemployment.
Businessleaderscannothide.They
needtoengage.Theymustlistenand
learnsothattheycanrebuildthesocial
contractwithbroadersociety.Youcan
readmoreaboutthisground-breaking
researchbyvisitingourwebsiteor
downloadingthereport.
EmilyLevinisanAssociateinthe
Global agreement that business can provide global solutions
Businesses CAN provide solutions to the major challenges
(% Net Agreement)
Which TWO of the following institutions is most effective TODAY in providing solutions to the major challenges facing your country?
JAPAN
SOUTH AFRICA
NETHERLANDS
FINLAND
DENMARK
BELGIUM
FRANCE
SINGAPORE
POLAND
SWITZERLAND
SWEDEN
UAE
AUSTRIA
ITALY
BRAZIL
UK
AUSTRALIA
SPAIN
MEXICO
GERMANY
INDONESIA
USA
INDIA
THAILAND
80%
67% 66%
64% 64% 64%
60% 59% 59% 59%
57% 56% 55% 55% 54% 53% 52% 51% 50% 49%
47%
43%
40% 40%
Global agreement that business can provide global solutions
Businesses CAN provide solutions to the major challenges
The Five Gs that Define the World
We discovered five key drivers to how someone feels, thinks and responds to the world, their work and their future:
Generations – Millennials, Gen X and Baby Boomers
Gender – Men and Women
Geography – Emerging vs Developed Markets
Global cities – City dwellers vs those living outside of cities
Graduation – People with university degrees and without

14
How can Africa live up to its
potential?
Brunswickinterviewsinternationaltradeexpert
CatherineGrantMakokera
Brunswick caught up with
international trade expert
Catherine Grant Makokera.
Their conversation on the
new trade dynamics for
Africa zoomed in on some
of the key topics that WEF
Africa will be tackling on
3-5 May 2017 in Durban.
Ms. Grant Makorera is Director at
Tutwa Consulting Group. She is also
a research associate at the trade law
centre at Stellenbosch University and
teaches at Wits Business School. Ms.
Grant Makokera was a diplomat for
New Zealand for over 10 years and
was posted in New York, Geneva and
Pretoria, where she was Deputy High
Commissioner. Ms. Grant Mako-
rera has held positions in trade and
diplomacy with Business Unity South
Africa, Southern African Development
Community, and the South African
Institute of International Affairs.
What will be the impact of the
Trump Presidency on global trade,
growth and development?
Historically, the US led the charge of
mega regional trade agreements but
President Trump is now backing out of
these trade agreements. How Asia will
respond will be critical going forward.
The question is whether China will
take up the mantle and push ahead
with the integration of the Asian
markets. This will be positive if China
protects the multi-lateral trading
system and advances free trade
agreements. However, if the response
is to simply trade more internally
amongst Asian countries, then that
could be detrimental to countries in
the Middle East and here in Africa.
The danger is that other countries
respond with their own protectionist
agenda, which will result in spiraling
trade wars. The Chinese take a
longer term view of these things so
we might well see that they have a
more nuanced response to increasing
protectionism in developed markets.
What about the UK and the impact of
Brexit?
Trade agreements take a long time to
negotiate so the current uncertainty
could linger. It’s not clear what
rules will govern trade with the UK
as current trade agreements were
negotiated when they were in the
WTO as part of the EU membership.
The UK does not have a set of
commitments at a multilateral level.
There are a whole lot of uncertainties
and we know that business doesn’t
like uncertainty.
Nevertheless, the UK remains an
important trading partner in its own
right. Once it leaves the EU it will need
to reestablish its place in the world
as a trade negotiating country. It will
need to form bilateral relationships,
including with India, Africa and the
Middle East.
Statements from the UK are that it
will be looking for even better market
access than before. That may be
bullish talk as they may not have the
same negotiating leverage that the
EU has as a block. However with some
countries, possibly Australia and New
Zealand where they had agreements
prior to UK joining the EU, it may be
relatively straightforward.
They’ve indicated South Africa is a
priority. That’s not surprising given
that South Africa is the UK’s biggest
trading partner on the African
continent and the significant British
investments in the country. However,
South Africa will have to negotiate as
a member of the Southern African
Customs Union and that itself
comes with complexities as you have
five member countries. Also such
negotiations take time – the India
SACU deal, for instance, is not yet
finalized despite being ongoing for at
least 10 years.
14
Brunswick Exclusive
Catherine Grant Makokera

15
Why is intra-regional trade
important?
ManyAfricancountrieshavelimited
marketsize.Manyarealsolandlocked.
Efficienciesinthemovementofgoods
betweenAfricannationsistherefore
fundamental. Thisisalsoimportant
duetotheuncertaintyaroundour
traditionalmarketsbecomingmore
protectionistandwhethertheywill
remainasopentoexportsasinthe
past.Buildinglinkagestolarger
marketssuchasIndiaandtheMiddle
Eastprovidesanavenuetoovercome
someofthosechallenges.
How do we open up opportunities
with the wider region?
InAfrica,wearestillstuckina
traditionalresourcepatternoftrade.
Wearenotyetleveragingthepotential
fortheestablishmentestablishment
ofnewmanufacturingbases.India,
forinstance,hasbeensuccessfulin
developingagriculturalmachinery
insupportofsmallscalefarming,
whichisalsoachallengefacingthe
Africancontinent.establishment
ofnewmanufacturingbases.India,
forinstance,hasbeensuccessfulin
developingagriculturalmachineryin
supportofsmallscalefarming,which
isalsoachallengefacingtheAfrican
continent.
What are the main barriers to
intra-Africa trade?
Itcomesdowntoadministration,
customsproceduresandinfrastructure.
Evenifwehaveagoodproduct,it’s
oftencheaperandeasiertoship
thesegoodsoverseasthantomove
themaroundtheregion. Countries
likeEthiopiaandtheDRCare
geographicallylarge.Alackofrail
androadinfrastructureoftenmeans
thatyoucanhaveafoodshortageon
onesideofthecountryandanexcess
supplyontheother. Bottlenecks
arealsocreatedbecauseofvested
interests.Forexample,theownersof
capitalintensiveroadtransportfleets
inmanypartsofthecontinentare
oftenthepoliticalelite–that’sone
reasonwhyrailisnotefficient.
Thereareotherchallengestoo.
InBotswana,forinstance,landis
controlledatthedistrictcouncillevel
andevengettingaplottosetupa
manufacturingoperationcanbea
drawnoutprocess.Othercomplaints
areaccesstofinanceandskilledlabour.
Thoseinstart-upphaseoftenrequire
someskilledforeignlabour,whichis
increasinglydifficult.
Fortunatelyhowever,progressis
beingmadeinthemodernizationof
customsformanyAfricancountries.
Thatmayseemsimplebutitwillmake
ahugedifferenceinefficienciesandthe
reductionofcorruption.
Are there any other lessons to learn?
Improvingphysicalinfrastructure–the
roads,railandborderpost–hasbeen
akeyfocusformanygovernments.
Butwe’venottakenaholisticview.
Wealsoneedtofocusonthesystems
andprocessesforthemanagementof
ports.
Sometimesgovernmentsgiveaway
controlwhentheysignconcessions
andoperationalagreementswith
privatesectorcompanies.Forexample,
theMaputoportchargesinUSDollars
butthebulkofthetrafficiswithSouth
Africa.SothemomenttheRandfalls,
thenearbyRichardsBayportinSouth
Africabecomesmuchmorecost
effective.Youhaveaninefficiency
there.
What are roles of government and
business?
Theyshouldlooktounderstandeach
otherandcreatemutuallysupportive
objectives.Becauseyouwantto
makeaprofitdoesnotnecessarily
meanyouareanti-government.Nor
shouldtheprivatesectornecessarily
beseenasnotbeingsupportiveof
governmentobjectives.Thereshould
bemoreopenness. Publicprivate
partnershipscanwork.Theycanhelp
prioritizeinvestmentsandovercome
obstacles.Therearesuccessfulcase
studiesthatshouldbehighlighted.
Theproblemisthatcommunications
isoftendysfunctional.Wespeak
differentlanguages.Organizations
likeNEDLACcanprovidetheplatform
formultiplestakeholders–including
business,governmentandlabour–to
communicateandunderstandeach
other.
What role can the media play?
Unfortunately,thetendencyin
manyAfricancountriesistocriticize,
restrictortrytoshutdownnegative
commentaryinthemedia.Instead,
thefocusshouldbeonunderstanding
mediaandthepowerofsocial
media,andstrategicallyleveraging
opportunitiestotellyourownstories.
Goodcommunicationscangoalong
way.
EastAfricaisagoodexample.
Kenyahasastrongdomesticmedia
sector,withanactivesocialmedia
environment.Politiciansandpolicy
makersincreasinglydemonstrate
understandingandleveragethistoget
theirmessagesacross.Rwandaisalso
followingsuite.
AsAfricansweneedtotellourown
stories.Wecannotjustrelyonthe
viewsofoutsiderstotellourstories.
Internationalmediahavebeenknown
todriveaparticularAfro-pessimistic
agenda.Itisthereforeuptoustomake
thegoodstoriesmoreappealing.We
mustfindwhatisinterestingand
relevanttoourmarket.
Should we fear the Fourth Industrial
Revolution?
Itisvitalthatwefindsustainableways
ofovercomingthetrendofjobless
growth. Industrializationpoliciesmust
belinkedtoskillsdevelopmentand
employment.ManyAfricancompanies
areparticipatingintheso-called
“FourthIndustrialRevolution”.Many
areengagingaroundautomationand
robotics. Theyshouldnotbehindered
fromusingnewtechnologiesand
pursuinginnovation.Howeveritis
alsoimportantthatpolicymakers
jointhisdiscussionsothatwecan
jointlynavigatethechallengesand
opportunitiesandgetthatbalance
right.
ThisiswhereWEFAfricacanplayarole
inencouragingengagementbetween
unions,policymakersandprivate
investors.Wecannotputourheads
inthesand.Itisclearthattherewill
inevitablybetradeoffs. Solet’sengage
earlyon.
IrisSibandaisaDirectorinthe

16
Motoring ahead
Carmanufacturingasabarometerof
Africa’srisingmiddleclass
Africa’s burgeoning
middle class continues
to attract global investor
attention. According to
McKinsey Global Institute
(MGI), African household
consumption growth has
been the second fastest of
any region after emerging
Asia.
This will continue to rise strongly to
reach $2.1 trillion by 2025, up almost
4% on current figures, largely due
to a large youthful population, rapid
urbanisation and rising incomes. The
consultancy expects the continent to
have a larger workforce than either
China or India by 2034.
One group to sit up and take note of
this potential is the international
automotive manufacturing and
assembly sector. From South Africa
to Nigeria, Kenya, Morocco, Algeria
and Egypt, in-country manufacturing
and assembly of vehicles and spares is
fuelling skills and technology transfer,
job creation and exports, while
also meeting broader government
objectives for industrial development
and economic growth.
Thanks to comprehensive, long-
term state incentive programmes,
South Africa – the continent’s most
advanced economy – has benefitted
from substantial investments from
a range of global car manufacturers.
Today, the automotive sector in one of
the largest manufacturing industries
in the country, contributing 7.5%
to GDP and employing more than a
100,000 people directly. South Africa
is not only seen as the continent’s
manufacturing hub but also as a
gateway to the rest of the continent.
Besides the rising middle class, an
expected increase in disposable
income and still largely untapped
markets, international vehicle
manufacturers are also looking to key
markets in Africa because of relatively
lower labour costs. Consultancy
Frost & Sullivan is particularly bullish
about the potential of the automotive
sector in Africa. In a recent report it
states that “if new-vehicle sales in
Africa grow to seven units per 1,000
inhabitants — a significant feat —
total new-vehicle sales will reach
about 7.7-million units annually.
Africa would become the fourth-
largest new-car regional market after
China, the US and Europe and larger
than Japan at 4.3-million units in
2016.”
Ultimately Africa’s domestic vehicle
market will be a barometer of the
health and sustainability of the rise
in Africa’s middle class. Unlike other
markets where car ownership is in
decline with the advent of Uber and
other car-pooling services, this trend
is still some way off in sub-Saharan
Africa as car ownership continues to
be aspirational and the hallmark of
economic development. For foreign
companies entering these markets,
it is important they communicate
their value offering to consumers,
whether this be price, quality, safety
or reliability. And once they have
communicated they must deliver
on the promise. When they fail to
do this, they should expect African
consumers and regulators to make
their displeasure public in newspapers
and on TV and radio shows, as well as
on social media channels like Twitter
and Facebook, which are booming
across the continent.
While new Far Eastern manufacturers
have made strong inroads in African
markets given their competitive price
offerings, some have come under flak
when this has been perceived to be at
the expense of quality.
Traditional Western brands too
have been severely and publicly
criticised, particularly when they
failed to adequately respond to
issues like safety and reliability. The
opportunities are enormousbut to
succeed in the long run it ultimately
it comes down to building and
maintaining a strong brand and
reputation that consumers trust and
desire.
As the middle class continues to
swell along with their disposable
income, consumers will be even more
discerning. Brand and reputation
management will become a corporate
imperative for all players on the
continent.
AtusayeMughoghoisanAssociateinthe
16

17
Upcoming Events
World Economic Forum on
Africa
Durban, South Africa
3-5 May 2017
Euromoney Emirates
Conference
Sharjah, UAE
8-9 May 2017
The Euromomey Kenya
Conference
Kenya
9 May 2017
Smart Cities Expo 2017
New Delhi, India
10-12 May 2017
World Economic Forum
ASEAN
Singapore
1-12 May 2017
News Corp VCCircle
Payments Forum 2017
Mumbai, India
17 May 2017
Tech in Asia Conference
Singapore
17-18 May 2017
Middle East Investment
Summit
Dubai, UAE
22-23 May 2017
CommunicAsia
Singapore
23-25 May 2017
Citibank India Investor
Conference
Mumbai, India
1-2 June 2017
Morgan Stanley India
Summit
Mumbai, India
6-8 June 2017
The Economist Nigeria
Summit
London
8-9 October 2017

18
Brunswick is an advisory firm specializing in business critical issues. We help clients
navigate the interconnected worlds of finance, public affairs and society to build trusted
relationships with all stakeholders.
Brunswick is a global partnership with 24 offices in 14 countries. Founded in 1987, the firm
has grown organically, operating as a single profit centre – allowing us to respond seamlessly
to our clients’ needs, wherever they are in the world.
Brunswick has deep capabilities and local market knowledge across the India, Southeast Asia,
Middle East and Africa region. We support the growing number of international clients with
significant interests and exposure in the region and leading companies based locally. Our
teams work closely with colleagues across the region to deliver intelligence, strategic counsel,
and sector and specialist area expertise.
For more information, please contact ISMEA@brunswickgroup.com
The ISMEA Group
South Africa
Marina Bidoli
Partner
UAE
Alex Blake-Milton
Partner
Singapore
Kate Holgate
Partner
Jean Tan
Director
India
Khozem Merchant
Partner
Azhar Khan
Partner
Iris Sibanda
Director
Emily Levin
Associate
James Allan
Associate
Hassan Fattah
Partner

Brunswick ISMEA Quarterly Newsletter - May 2017

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