ASEAN’s combined nominal gross domestic product (GDP) is already over US$2.8 trillion (S$3.8 trillion) and if counted as a single entity, it would rank sixth in the world, behind the United States, China, Japan, India and Germany.
The younger countries (Cambodia, Myanmar and Laos) are growing at over 7 per cent per annum, whereas the members with a population of over 100 million (Indonesia, the Philippines and Vietnam) are all growing at 5 to 6 per cent.
The Asean+3 (China including Hong Kong, Japan and South Korea) grouping is expected to grow at around 5 per cent per annum in 2017-2018, buoyed by domestic consumption, despite some protectionist headwinds. This is almost double that of the advanced countries and emerging markets in Latin America, Africa and the Middle East.
The game changer may arrive in the area of technology and innovation. A study last year by Temasek and Google suggested that just six Asean economies (Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) will become the fastest-growing Internet region in the world, with over 480 million users by 2020.
This group’s Internet economy (mostly e-commerce) will grow by a roughly 14 per cent compound annual growth rate (CAGR) to US$200 billion by 2025.
The reasons for the fast growth are because the region has a burgeoning young population with 70 per cent of people under the age of 40, and rapidly growing spending power.
Out of the top 20 global Internet countries, 11 are in Asia, of which four (Indonesia, the Philippines, Vietnam and Thailand) are in Asean.
Outside the US and India, Facebook’s user base is huge in South-east Asia, of which 126 million are in Indonesia. Malaysians have 50 per cent more chance of using Facebook for business reasons than the world average.
For example, the Philippines earned US$25 billion in revenue from business process outsourcing (BPO) last year, providing over 1.3 million jobs.
The World Bank has estimated that BPO revenues could soar to over US$50 billion and create another 1.3 million jobs by 2020. Thailand, already a major auto-components manufacturer and processed food producer, is aiming for Thailand 4.0 to upgrade its digital capacity in manufacturing and services, much in line with China’s Internet+ and Made in China 2025 strategy and Europe’s Industry 4.0.