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After 50 Years, ASEAN emerges as Global Growth Leader

After 50 Years, ASEAN emerges as Global Growth Leader
nordictreats.es © Farmers harvesting water hyacith

The Association of Southeast Asian Nations (ASEAN) has much to crow about as it marks its 50th anniversary: economic and social progress, a manufacturing powerhouse and relative political stability.

The 10 ASEAN members boast of some of the world’s fastest expanding economies like the Philippines and Vietnam, with growth rates of more than 6 percent. With a combined population of over 620 million and an economy of $2.6 trillion, the investment potential is huge and by 2020, the region will have the world’s fifth largest economy, the World Economic Forum predicts.

Apple store Singapore | Apple.com
Apple store Singapore | Apple.com

 

Yet the goal of integrated economies remains a long way off. Businesses still face restrictions despite a 2015 blueprint mapping steps to eliminate trade barriers and create a single market to allow the free flow of goods, services, and labor.

Diverse political regimes from a democracy in Indonesia to a military junta in Thailand to communist governments in Laos and Vietnam present barriers to closer ties. Issues such as competing claims over parts of the South China Sea have also fueled discord. 

Danang, Vietnam | Shutterstock
Danang, Vietnam | Shutterstock

 

Established in 1967 in Bangkok, the five founding members -- Indonesia, Malaysia, the Philippines, Singapore and Thailand -- set up Asean to boost economic growth and promote peace. Since then, they’ve transformed from largely poor and agricultural nations into production hubs of products from cars to mobile phones.

The following charts outline the Asean economy five decades on:

Economic Outlook

Gross domestic product in Asean has surged to $2.6 trillion in 2016, about the size of U.K.’s economy, from a mere $37.6 billion in 1970. Growth in Asean is seen at 4.9 percent next year, with Myanmar, Vietnam and the Philippines posting the fastest expansion in the region, according to BMI Research.

Keterangan Gambar (© Pemilik Gambar)

Trade

Many of the bigger Asean members like Singapore are heavily export-reliant, making them dependent on the global growth cycle. Southeast Asia has emerged as a strong manufacturing alternative to neighboring China, helped by lower labor costs, growing domestic demand and improvements in infrastructure.

Keterangan Gambar (© Pemilik Gambar)

Trade among Asean members remains low compared to regional groupings like the EU, according to Capital Economics Ltd. Intra-regional trade makes up about a fifth of total trade, compared with more than 60 percent in the EU. Non-tariff barriers are still high among members, especially in Indonesia, Gareth Leather, a senior Asia economist in London, said in a note.

Keterangan Gambar (© Pemilik Gambar)

Investment

Many countries in the region are enjoying the benefits of a demographic dividend. While the likes of China, Japan and Hong Kong have all seen a contraction in their workforces since 2015, Southeast Asia will see its working-age population expand through 2020, Nomura Holdings Inc. estimates show.

Jakarta at night | flickr
Jakarta at night | flickr

 

The region’s strong growth outlook is luring more investment. Coca-Cola Co. is expanding in Vietnam and in Myanmar while Apple Inc. is building research centers in Indonesia.

Keterangan Gambar (© Pemilik Gambar)

Source : Bloomberg by Melissa Cook

Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to More understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy Less
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