Winning in ASEAN

Steven Cranwell Chief Executive Officer, US and Americas

11 Jul 2023

ASEAN countries are well positioned for growth, but new research suggests that partnerships are the key to fulfilling the region’s potential

The Association of Southeast Asian Nations (ASEAN) region stands at a crossroads. On the one hand, the economies of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam are bouncing back from the disruption of the COVID-19 pandemic. On the other, new research suggests historical drivers of success in the region may not be enough to deliver further growth as the world moves on from the crisis.

There are certainly reasons to be positive. The International Monetary Fund expects the ASEAN-5 economies (Indonesia, Malaysia, the Philippines, Singapore and Thailand) to expand by 4.3 per cent in 2023 and by 4.7 per cent in 2024 – well ahead of global growth, but also in advance of many other developing economies. And although it accounts for less than 4 per cent of global GDP, ASEAN attracted around 12 per cent of foreign direct investment in 2021, up from an average of 7 per cent between 2011 and 2017.

Moreover, argues Alex Holmes, Senior Asia Economist at think-tank Oxford Economics, inflationary pressures are finally easing. “Inflation is past its peak and starting to edge down,” he says. “As it heads back towards target, we expect central banks’ concerns will start to abate; many have already pared back the pace of tightening alongside the US Fed.”

But how can ASEAN best capitalise on this improving picture? “Capturing ASEAN’s full potential will require greater collaboration and partnership between the private and public sectors,” says Steven Cranwell, CEO and Regional Head of Client Coverage, Americas at Standard Chartered. “This will ensure investment is delivered into jurisdictions and sectors that will deliver the greatest benefit and have the largest impact.”

In fact, Standard Chartered’s Winning in ASEAN research suggests that 93 per cent of business leaders globally expect positive revenue growth from their ASEAN operations between 2023 and 2025; 81 per cent of business leaders expect that the recently agreed Regional Comprehensive Economic Partnership (RCEP) will drive an increase in their organisation’s investment in ASEAN between 2022 and 2026. But the bank’s study also recommends that the region should look beyond its traditional strengths in areas such as manufacturing.

Discover the four key sectors for ASEAN’s future and sustainable growth in ASEAN by reading the article in full and more insights on dynamic markets.

This content was paid for and produced by Standard Chartered in partnership with the Commercial Department of the Financial Times.