Key Emerging Markets: Indonesia, Vietnam, Thailand and Myanmar
Major Industries: Coal, Palm Oil, Sugar, Textile, Telecommunications, Electronics, Medical Equipment
South-East Asia (SEA) in recent years has been an area of growth and prosperity, with recording 2019 GDP at USD$3.1trn and 5-year CAGR of 5.7% from 2020 to 2024. 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.
With favourable demographics, well-educated and cheap workforce, rich endowment of natural resources, and an advantageous location, Southeast Asia’s economy is expected to sustain the rapid growth of the recent past. Most of ASEAN economies have been historically dependent on agriculture but with globalization, 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 and this will likely help them emerge as an alternative destination for foreign investment outside of China. Previously heavily dependent on external demand, domestic drivers will also play a more important role in Southeast Asian economies going forward.
Increased global uncertainties continue to put pressure on the growth prospects of the region; however, ASEAN economies continue to grow anchored by resilient private consumption and domestic growth.