KOREA FOUNDATION

The current global economy is stagnating under high interest and exchange rates, a result of a sudden reduction in liquidity due to the COVID-19 pandemic, and the disruption of supply chains following Russia’s invasion of Ukraine. Yet even in the face of such crises, the 10 ASEAN member states (AMS) have found opportunities for growth. With a combined population of 7 billion and GDP of USD 3.6 trillion, and with foreign direct investment funds and industries increasingly diverted to the likes of Indonesia and Viet Nam, the AMS are a rising new market poised to take the place of China.

Industrial trends and investment strategies are summarized below for each of the 10 AMS.

1 Brunei Darussalam: Petroleum and natural gas make up 97 percent of industry in this small country with a population of just 450,000. As a monarchy with most public services provided free of charge, Brunei Darussalam banks on tourism to drive future growth.

2 Cambodia: Cambodia, with a population of 17 million, is situated between Lao PDR, Thailand, and Viet Nam. Currently, the nation is striving to establish itself in the region through the “Miracle on the Mekong.” The prolonged rule of ex-Prime Minister Hun Sen and his family, coupled with excessive reliance on Chinese capital, are said to be hindering the country’s long-term progress.

3 Indonesia: Home to ASEAN’s largest economy, Indonesia has a population of 280 million and is rich in natural resources including oil and gas fields, nickel, graphite, lithium, and vanadium. Indonesia is a one of China’s strongest competitors across all industries, from general manufacturing and heavy chemicals to aerospace and service.

4 Lao PDR: This landlocked country of 6.5 million is substantially influenced by Thailand and Viet Nam. Some Korean businesses have a presence here, primarily in small-scale manufacturing and micro-financing.

5 Malaysia: Malaysia has an advanced tourism and service industry, and a population of 35 million. In addition to being a global center for international and Islamic finance, Malaysia also has an active high value-added manufacturing industry thanks to neighboring Singapore.

6 Myanmar: This country of 55 million has been under military rule for over half a century. It has enormous potential, with more than 3 billion people living in the neighboring nations of China, India, and Thailand. Myanmar was once thought of as an alternative to Viet Nam, but its current infrastructure is insufficient.

7 The Philippines: With its population of 117 million, the Philippines has the second largest consumer market among the AMS. Japan accounts for an overwhelming majority of Filipino trade, while Korea imports fruits and agricultural produce. The Philippines is rich in natural resources, being the second and fourth largest global producer of nickel and cobalt, respectively.

8 Singapore: This city-state with a population of 5.65 million has become Asia’s leading financial market as well as an Asian outpost for global enterprise through intermediary trade. Singapore is widely reputed to be the most business-competitive economy in the world.

9 Thailand: With its hub airports, Thailand is both a tourism giant and an axis of ASEAN logistics and distribution. The Thai population stands at 72 million and the nation’s medical services boast some of the highest standards in Southeast Asia. For the first time in 10 years, economic progress is expected to be further accelerated under a new government following the May general elections.

10 Viet Nam: Viet Nam is Korea’s third largest trade partner, with upwards of 8,000 Korean firms investing USD 82 billion into the country. After US President Joe Biden’s visit in September, it has also become a comprehensive and strategic partner of the US. Following the country’s plan to upgrade its national credit rating to “investment grade,” foreign investment is flowing in from the likes of the US and Europe.