Over at Asia Sentinel, a new piece notes the extremely high growth rates
posted in the third and fourth quarters of 2012 by major Southeast Asian
economies.
Most notably, Thailand posted a
staggering 18.9 percent year-on-year growth rate in the fourth quarter of 2012.
Although this growth is somewhat artificial, since it is compared to the anemic
growth in the flood-wracked fourth quarter of 2011, it is still extremely
impressive.
The Philippines also is growing
strongly, posted over 7 percent growth in the third quarter of 2012, and
Malaysia, Singapore, and Indonesia also are booming.
Of the largest economies in the
region, only Vietnam, still facing a morass of bad loans at state banks and
companies, and serious Party political infighting, is looking gloomy.
Even second-tier ASEAN economies
like Cambodia and Myanmar are doing well, with an increasingly attractive
Myanmar poised to become one of the hottest emerging markets in the world over
the rest of the decade.
Asia Sentinel correctly notes
that ASEAN has become more competitive in many manufacturing industries than
China, particularly in labour-intensive manufacturing. Many Japanese and
Western firms, especially in electronics and auto manufacturing, have shifted
operations to ASEAN or at least embarked on China+1 strategies that include
ASEAN nations.
But this competitiveness is not
largely due to proactive policymaking among ASEAN states, with the exception of
the Philippines (where President Benigno Aquino has taken major strides to
improve the investment climate) and to some extent Singapore, which is no
longer home to much low-end manufacturing anyway.
Instead, ASEAN is benefiting from
China’s changing demographics, the result of the “one child” policy, as well as
the beneficial demographics in ASEAN nations like Indonesia, which have large
working-age populations today and small elderly populations. In addition,
China’s increasingly aggressive behavior towards neighbors like India, Japan,
and Vietnam have not only angered people in those countries but worried foreign
investors, leading to greater willingness by investors to consider a China +1
strategy.
Benefiting from China’s
demographics and mistakes isn’t bad: certainly, Thais would prefer 18.9 percent
growth to last year’s weakness, and citizens of other ASEAN states are
benefiting from the resurgence of manufacturing and boost in foreign
investment.
But for ASEAN to build on what
it’s been given, it needs to be more proactive in fixing what still ails it. It
needs to make good on its promises to improve regional rail and road
architecture, empower its secretary-general with greater means to push for
economic and trade interdependence, and actually achieve the goals of the ASEAN
Economic Community—which are likely to be missed by the target date of 2015.
Other than Singapore, ASEAN
nations also need to reform their education systems, which still leave most
citizens unprepared for a move into higher-end manufacturing. Only when these
changes are made should ASEAN truly celebrate.
Joshua Kurlantzick
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
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