It' time to put ASEAN on the map
- By Jaspal Bindra
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E-mail Shanghai Daily, June 18, 2013
AS demand slumps in debt-ridden Europe, the ASEAN region looks increasingly attractive for profit-hungry British corporates.
Recent data showed a 5.8 percent drop in UK exports to the European Union, underscoring the need for British businesses to look elsewhere for growth. Many have already done so - a good example being Diageo, the world's biggest drinks company, which famously set its sights on generating half its turnover in faster-growing markets by 2015. At 42 percent, it has nearly reached this mark, two years ahead of time.
Often forgotten in the excitement about China and India, the Association of South East Asian Nations is widely seen as the big growth story of 2013. Its prospects are the stuff of envy for struggling Western economies: rising incomes and spending, an abundant workforce and GDP growth easily outstripping the global average.
On top of this, ASEAN boasts a wide array of strengths: Brunei, Indonesia, Malaysia, the Philippines, Thailand and Vietnam are rich in natural resources. Countries such as Indonesia and Vietnam are strong contenders as alternative manufacturing bases to China, and Singapore is one of world's most sophisticated hubs for business and financial services. When Rolls-Royce invested in its first big aerospace manufacturing facility outside the UK, it chose to do so in the city state, making this ASEAN member its gateway to the fast-growing markets of Asia.
If it were a single economy, ASEAN (which also counts Cambodia, Laos and Myanmar) would be the world's ninth largest by GDP - bigger than India and Russia - and its third most populous with 600 million people.
A growing center of trade, ASEAN is increasingly where the action is, with corporates busy setting up distribution, sourcing and manufacturing to capture opportunities within the 10 markets and more widely across Asia. Strategically placed across important new trade corridors, ASEAN is part of the world's biggest regional trade agreement (measured by population) with China, India, South Korea, New Zealand, Australia and Japan. This ASEAN plus six grouping represents around a third of the world's GDP and almost half of its population.
Between 2005 and 2010, intra-ASEAN trade surged 55 percent, and ASEAN trade with the rest of Asia has continued to grow strongly.
In 2011, China overtook the EU as ASEAN's largest trading partner, emphasizing the attractiveness of ASEAN as a hub from which to connect with customers across Asia. Another good reason to put ASEAN on the map: it is on a path to economic convergence, with plans for an ASEAN economic community by 2015. While the plans are ambitious and some concrete achievements are needed to solidify momentum for ASEAN integration, trade is already one successful aspect.
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