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ASEAN was founded in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Later Brunei, Cambodia, Laos and Myanmar were also added to this economically motivated organization. Its prime goal is to increase trade and investments in the region and bring peace and prosperity. ASEAN is a global hub of manufacturing and trade, as well as one of the fastest growing retail markets in the world.
Together, the ASEAN countries are the 7th largest economy in the world, with a combined GDP of US$ 2.4 trillion in 2013. Most important factor apart from strongly growing manufacturing sector and trade sector is ‘Low Inflation’. Inflation adjusted at just 2.8% in ASEAN in 2013, which is one-third of India and lower than world average. ASEAN has surpassed the world in GDP growth, with an average growth of 5% year-on-year. Some members have shown exemplary growth, like Vietnam which doubled its GDP per capita from US$ 1300 in 1995 to US$ 2600 in 2006 in just 11 years.
The ASEAN countries are very different from each other. Singapore’s GDP per capita is almost 30 times more than Laos and more than 50 times higher than Myanmar and Cambodia. Indonesia alone accounts for 40% of the GDP among ASEAN countries, and is also a member of G20. ASEAN countries possesses very vast and diverse cultures: Indonesia is almost 90% Muslim, while the Philippines is more than 80% Roman Catholic, and Thailand is more than 95% Buddhist.
FDI in ASEAN in 2013 continued to surge and was about on par with that in China, for the first time since 1993. FDI inflows exceeded US$ 122 billion pushing the inward FDI stock to US$ 1.6 trillion. ASEAN attracted more than 16% of global FDI during the same period.
Today, 22% of population in ASEAN lives in cities and their urban areas accounted to more than 52% of combined GDP of all ASEAN countries. Urban contribution to the combined economy is expected to reach 60% of the combined GDP by 2020.
Indonesia is one of the fastest growing and most promising economy in Asia. Indonesia's high growth rate in recent years was driven by high mineral exports, which accounts to 37.68% of total exports in value terms. Indonesia GDP is growing at a moderate rate of 5% in 2015. Indonesia was once a member of OPEC, but in January 2009, had its membership revoked. Machine imports have increased for the country, reaching 24.67% of total imports in value terms.
In 2014, Indonesia’s major business partners are Asian Countries. These countries accounted for 71% of Import and 75% of Exports. China, Japan and Singapore are the biggest trade markets for Indonesia. Manufacturing and mining provides the backbone to the economy and is the major source of employment. However, agriculture provides livelihood to most of the population in the country.
As of 2014, Indonesia is home to 249.86 million. This number is expected to reach 271 million by 2020, with the majority of the population lying between ages 20-35, and living in urban areas. High population growth is due to high birth rate, better living conditions and improved healthcare.
Malaysia is one of the few developing countries in the Asia pacific region which has used its abundant natural resources to grow sustainably. From being a major exporter of raw materials, the country has diversified in to other aspects of the economy. Taking a major share in the exports market is the manufacturing sector, making up almost 60% of the total exports. In the year 2014, Malaysia saw a slowdown in private investments and government expenditure; however, surge in exports boosted the GDP growth to 6% year-on-year. The GDP of the region recorded US$312.44 billion with a GDP per capita of US$6990. While agriculture and mining account for 9% of GDP each, services is the largest, accounting for 54% of GDP, followed by manufacturing making up 25% of GDP. Despite low and fluctuating global oil prices and lower energy export prices, we expect the growth rate to slow down to 4.7% in 2015 and pick up pace to touch 5% in 2016.
Philippines is 3rd fastest growing and most promising economy in the world. Philippines's high growth rate in recent years was driven by high integrated circuits and computers & accessories export, which accounts to 38.13% of total exports in value terms. Philippines GDP is growing at a high rate of 6.9% in 2015. Imports of Machines have increased, reaching 31.97% of total imports in value terms and mineral products have a share of 20.86% of total imports.
As of 2014, Philippines’s most important business partners are China and Japan. Together, they account for 24% in Import and 36.16% in Exports. Asia is the biggest trade market for Philippines. Machine Manufacturing provides the backbone to the economy and is the major source of employment in the country. Although, Agriculture provides the main livelihood to most of the population in the country.
Not many countries have been able to effect the rise out of colonial exploitation with the determination that Singapore, one of the most prosperous nation-states in the world, has. The country is one of the Four Asian Tigers, or the four Asian countries which benefited from massive growth between 1960s and 1990s, going on to attain competitive advantage in one or more fields. Singapore’s 1965 GDP per capita of US$511 pales in comparison to its GDP per capita of US$55,182. It is the only Asian country to achieve a triple-A rating from all credit agencies, and to sustain it.
Singapore’s population is 100% urbanized. Cities boast of a well-developed transport infrastructure. While manufacturing drove the growth of the newly independent Singapore, today, services contribute to about 72% of Singapore’s GDP. Within servicers, retail and wholesale, business services, finance and insurance, transport and storage, and others are the highest contributors.
Thailand is growing at a moderate rate and is one of the most promising countries in the Asia-Pacific region, with exploding tourism and a vast manufacturing sector. Thailand's high growth rate in recent years was driven by Machines, and Plastic & Rubber export, which accounts for 43.77% of total exports in value terms. Thailand’s GDP grew at a slow rate of 2.3% in 2015. Deflation is a major factor for increased tourism as well as slowdown in economy. Imports of Gold and Crude Oil have increased the country reaching 10.1% of total imports in value terms and Metals products have a share of 14.55% of total imports.
Thailand’s major business partners are China and Japan in 2014, making up 40.36% in Import and 24.54% in Exports. Asia is the biggest trade market for Thailand. Computer Manufacturing and Rubber provides the backbone to the economy and is the most important source of revenue of the country. However, Tourism provides the main livelihood to most of the population in the country. Bangkok has more tourism than any other country in Asia-Pacific, with most people lying between ages 20-35. Fun and leisure is also the most growing sector of the country.
Myanmar is a Buddhist country trying really hard to preserve its ethnicity and religion. Recently, Myanmar lower house passed Four (4) religious bills but came into controversy for deviating from Right of Religion, UN Convention on the Elimination of all Forms of Discrimination against Women and the UN Convention on the Rights of the Child. In short, these bills do not accord with international human rights, law and standards.
Myanmar’s GDP is worth US$53 billion as of 2014, with an expected GDP growth rate of 6.5% in 2015, which is 4th highest among the ASEAN countries.
Cambodia’s GDP is just US$ 15 billion with a GDP growth of 7.2%, second highest among ASEAN countries. After achieving independence in 1953, Cambodia faced severe wars and destruction of its territory by Vietnam, the Khmer Dynasty and the French.
Cambodia’s rulers and population followed Hinduism. They later converted to Mahayana Buddhism. Currently, 96% of the population follows Buddhism in the country.
Laos has its roots in the ancient Lao Kingdom, which ruled the country for more than 300 years. Laos became a member of ASEAN in 1997 and WTO in 2013. Laos has the highest growing GDP among ASEAN countries with an expected GDP growth of 7.6% in 2015. Current GDP stands at US$ 11 billion.
Brunei is the worst performing country in ASEAN. With a GDP of just US$ 16 billion, Brunei’s GDP is decreasing at an expected rate of 0.2% YoY. Brunei is in deflation and prices are decreasing by 0.1%. Government budget is at 11.4%, which means they are spending around 80-90% of their income. Brunei has high current account surplus of almost 43%, which is one of the highest in the world.
Brunei is a big exporter of Oil and gas, which accounts to 96% of its exports. Most of it is exported to Japan, South Korea and India.
Key factors in the growth of ASEAN nations are high reserves, economic growth, availability of raw materials, rising transportation needs, un-matured and untapped markets in most of the countries, young workforce and cheap labour.
ASEAN Countries market is badly affected by low GDP, old technology, undeveloped infrastructure, traditional agriculture practices, low disposable income (except Singapore), low investments and isolated economy. Slump in oil prices in 2015, decreased the revenue of Indonesia and Brunei.
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