South East Asia as an economic powerhouse

The World Economic Forum together with the Association for South East Asian Nations (ASEAN) Secretariat has been hosting the Grow Asia Forum in Phnom Penh, Cambodia, in May.

The Forum is a platform to enable agricultural development in South East Asia focusing on smallholder farmers and environmental sustainability. The objective of Grow Asia is to reach 10 million smallholder farmers to increase farm productivity, profitability and environmental sustainability by 2020.

The Forum has been running alongside the World Economic Forum’s larger ASEAN 2017 meeting ahead of the 50-year anniversary on August 8th of the setting up of ASEAN. ASEAN, which today comprises of the 10 member states of Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Laos, Myanmar, Cambodia and Vietnam, promotes economic growth and modernisation.

The region features heavily in concerns about food sustainability, notably the production of palm oil – one of the common features in many Western food corporations’ sustainability plans is to move towards sourcing sustainable palm oil. ASEAN members Indonesia and Malaysia account for around 84% of the world’s palm oil production. The region is also responsible for approximately 25% of global fish production especially Thailand, Vietnam, the Philippines and Indonesia.

The World Economic Forum has been running a series of articles about ASEAN in support of its meeting. One by Chandran Nair, Founder and CEO, Global Institute for Tomorrow, gives insight into how the region has changed in the past half century. For example, 50 years ago member states were largely undeveloped – Singapore, then the wealthiest member, only had a GDP per capita of US$600, today this stands at US$52,000. Fifty years ago almost three-quarters of ASEAN’s population lived in rural areas, today the rural-urban population is split 50:50 with a majority forecast to be living in cities by 2025.

The rapid economic growth of ASEAN member states

The 10 economies of ASEAN represented the seventh largest economy in the world in 2016, likely to become the sixth this year, and the fifth largest by 2020. ASEAN is the third largest economy in the region behind China and Japan and ASEAN member states have a combined GDP of US$2.6 trillion, up from US$1.3 trillion seven years ago. Of ASEAN’s roughly 600 million population (the third largest in the world after China and India), more than half is under 30 years old.

Nair writes: “Given the progress ASEAN has made in 50 years, the temptation is to see a linear trajectory of development and progress. But it would be too simplistic to pin all hopes on a Fourth Industrial Revolution as the key to the future of the region. If the sustainability challenges, which will affect hundreds of millions in the region, are to be tackled, then ASEAN will need to first address some of the pre-industrial practices that prevail and create a socio-economic revolution of its own that reflect its realities.”

Future sustainability challenges include addressing deforestation practices, reducing poverty especially in rural areas, increasing food security and the sustainable development of smallholder farming, managing rapid urbanisation and ensuring rural economies are not left behind.

Source: Nair, C. (2017). Retrieved from: https://www.weforum.org/agenda/2017/05/aseans-next-economic-revolution.