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Product and Economic Growth in South Asia

Product and Economic Growth in South Asia

 

In the last twenty years, product and economic growth in South Asia has grown exponentially.  Countries like Malaysia, Thailand, and Indonesia are forecast to increase economic growth by 2016.  Manufacturing exports, especially components for use in electronics and semiconductors, has transformed the economies of South Asia. As labor costs increase in other parts of Asia, South Asia has the opportunity to become the manufacturing center of the world.

 

The global economies of Southeast Asia are going strong despite staunched competition from powerhouses China and India.  Recent innovative leaps in such industries as healthcare, software development, automation, electronics, and pharmaceuticals, have made this possible.  While India is still considered the main center for computing components and electronics, the newly established Information and Communications Technology Domain has the capability of transforming South East Asia.  ICT will introduce new innovations in the areas of e-commerce, e-banking, online education, and other similar areas.

 

Southeast Asia consists of eleven countries and combined, these countries have a Gross Domestic Product of $1.9 trillion along with a population of 600 million.  If these eleven countries were one nation, it would be the ninth largest economy.  As a whole, Southeast Asia is seeing a growth in imports from the United States, signaling an increase in significant trade activity.  Indonesia, the biggest country of Southeast Asia, is also the fastest growing.  In January 2012, Indonesia’s coveted Fitch and Moody rating was upgraded to the ‘investment’ category – the most envied rating that Fitch and Moody awards.  Further, the country has been identified as one of the economies that will next experience long-term growth as an emerging economy.

 

Early indicators seem to point toward Southeast Asia obtaining very table GDP growth and growing consumer markets.  In fact, many believe that Southeast Asia will be an imposing economic capital as early as 2020.  Owing to an affordable labor force, we can expect to see this upward swing continue.  With the increase of startups making their way into overpopulated and heavily congested areas, many predict that sharing technologies (like car sharing service, Uber) will be highly successful.  In fact, a recent survey suggests that residents in Indonesia, the Philippines, and Thailand are open to the innovative idea.

Local and smaller innovation is taking root in Southeast Asia but that doesn’t mean that larger and well-known companies are ignoring the area.  On the contrary, established brands are eyeing South Asian countries as an area available for lucrative investment and success.  Speaking of Uber, the car service launched in Vietnam and Jakarta, earlier this year.  Focusing on travel and tourism, Airbnb has expanded into Thailand, Malaysia, and Singapore.

 

In an effort to maintain growth many South Asian countries will need to reinvent themselves.  Government policy will need to become more transparent to encourage trade and investment.  Looking ahead, investment and innovation opportunities may become strained unless countries can attract and embrace new sources of capital.

 

 

 

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