Key Emerging Markets: Indonesia, Vietnam, Thailand and Myanmar
Major Industries: Coal, Palm oil, Sugar, Cement, Textile, Telecommunications
South and South-East Asia (SEA) in recent years has been an area of growth and prosperity, with recording 2013 GDP at USD$2.4trn and 5-year CAGR of 9.74%. Most of these countries are part of the Association of South-East Asian nations (ASEAN), which was formalized on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Their main goal was to accelerate economic growth, social progress, cultural development, protection of regional peace and stability, and opportunities for member countries to discuss differences peaceably.
Stability of Region
In the past, Southeast Asia was beset by instability in the past, due to underdevelopment. However, with the formation of ASEAN and member nations working towards peace and stability, the region’s climate has improved drastically. While currently stable, this stability is relatively fragile and vulnerable with political unrest, and racial and religious clashes. Terrorism, corruption and resistance to authoritarian government are still rampant especially in countries such as Thailand, Myanmar, and Indonesia. However, work is in progress towards creating a more stable region by the ASEAN federation of nations.
Southeast Asia’s economy is immense and vibrant. Most of ASEAN economies greatly depend on agriculture but manufacturing and services have become increasingly important as well. Trade barriers have also been lowered by a continuous historical commitment to free trade through regional frameworks created through ASEAN, all of which continue to aspire toward a single market for goods, services and capital. Notably, major Southeast Asian economies now possess a stronger financial services industry that has clearly withstood the last global financial crisis. Previously heavily dependent on external demand, domestic drivers will play a more important role in Southeast Asian economies going forward.
Increased global uncertainties continue to shed a negative light on the growth prospects of the region; however, ASEAN economies will rely increasingly on domestic drivers of growth to improve economic resilience to external shocks. Moreover, the implementation of ASEAN Economic Community which is expected to be effective in 2015 will further boost the cooperation among the countries.