ASEAN Set for Post-Covid Growth and Prosperity

The ASEAN region is set for inclusive economic growth after the pandemic, thanks to coordinated COVID response efforts, the world’s largest regional free trade agreement, and digital transformation, the World Economic Forum said in an article in January as part of The Davos Agenda. Due to the pandemic, foreign direct investment (FDI) into ASEAN fell to US$137 billion in 2020, from a record high of US$182 billion in 2019, when it was the largest recipient of FDI in the developing world, wrote Joo-Ok Lee, Head, Regional Agenda – Asia-Pacific; Member of the Executive Committee, World Economic Forum, and Shaun Adam, Community Lead, Regional and Global Cooperation, Asia-Pacific, World Economic Forum.   

Despite the decline, ASEAN remained an attractive investment destination and the region’s share of global FDI rose from 11.9 percent in 2019 to 13.7 percent in 2020, while the intra-ASEAN share of FDI in the region increased from 12 percent to 17 percent.

The future looks bright from an economic perspective: ASEAN is the fifth-largest economy in the world, and is well on track to become the fourth largest by 2030, according to the WEF.

The ASEAN-led Regional Comprehensive Economic Partnership (RCEP) Agreement, which came into force on 1 January 2022, is also expected to drive growth and prosperity in the ASEAN member states as they keep markets open while strengthening regional economic integration towards post-pandemic inclusive recovery, WEF’s analysts noted.

Moreover, the recent adoption of the Consolidated Strategy on the Fourth Industrial Revolution (4IR) is set to advance ASEAN’s push for digital transformation and private investment in digital infrastructure development (5G networks and data centres), cloud computing, cybersecurity, artificial intelligence, and smart manufacturing.

Public-private cooperation is the way forward for businesses and governments to develop cooperative ecosystems to advance digital transformation and innovation, the Forum said.