Will the Next Asian Tiger Please Stand Up? Emerging Economies Poised to Advance
While much of the globe continues to search for an effective antidote to the global financial crisis, the economies of Southeast Asia have enjoyed an impressive recovery by any measure. Despite this performance, they face numerous challenges in their quest to become high-income countries. Macroeconomic policies, generally, have adapted well to changing circumstances. Yet there is no doubt that further developments, both domestic and external, will test the skills and resolve of policymakers and political leaders. This will provide a backdrop to the implementation of vital structural reforms and pursuit of regional integration. Policymakers will be challenged to minimize the side effects of this process while building resilience to shocks from outside the region and reaping the benefits for productivity, regional savings allocation, and, perhaps most importantly, living standards.
From our perspective, there is no one way to deal with these issues. ASEAN, the Association of Southeast Asian Nations, has identified four priorities to enable member countries and the region to meet crucial challenges from now to 2030.
- Broadening and deepening financial markets
- Harnessing human capital
- Building seamless transport and communications connectivity
- Strengthening governance
We examine the first and second elements in detail in this report. SEA-4 countries—Indonesia, Malaysia, the Philippines, and Vietnam—can grow by increasing productivity through improvements in the quality of human and financial capital, as well as other factors such as innovation.