Asia: toward a seismic shift
BANGKOK—Within a decade, visitors to Asean and South and North Asia may find their personal experiences in their respective destinations differing quite drastically.
Each Asian nation is busy operating at its own pace, plotting a new stage of economic development and growth—despite ongoing global economic uncertainty. In the process of this seismic shift, some nations have chosen to work in partnerships while others are tackling the challenges alone. All reflect Asia’s unique aspiration to take on global competitive pressure. Some aim to get out of the middle-income trap, while others want to secure a higher standard of living for their people.
In Asean, leading the pack are Malaysia and Singapore, the dual trackers. The high-speed train project linking Kuala Lumpur and Singapore is being built at an estimated cost of US$17 billion. Once completed, train travel between these two destinations will take just 90 minutes.
This will deepen links between the two high-income nations and expand scalability, especially for Singapore and its limited land and manpower. It could well be that Kuala Lumpur will join Singapore as another world-class city to work in and ease the latter’s vulnerability to being priced out as the world’s most expensive location.
The other two Asean dual trackers are Thailand and Myanmar (Burma). Although more humble, there are plans to bring the 120-million population market closer together. One day, they may even form a single market! Underway is the construction of special economic zones along the border between the two countries. This would facilitate freer flows of workers, businesses and communications, and merge the border area’s sub-economic zones, such as Mae Sot in Thailand’s Tak province and Mawlamyine in Myanmar.
During the decades that Myanmar was shut off from the world, the area was arguably, aside from Yangon, the highest income-generating part of the country, indicating the benefits of being adjacent to a complementary higher-income country.
On a grander scale, some economic-sector mergers between Thailand and Myanmar could be a game-changer to help fast-forward the latter’s development and income. Together, they have scalability, complementary economies and strategic geography. And let’s not forget the Dawei Special Economic Zone further south, which both countries are determined to make work despite the odds.
Of the other sizeable Asean members, Indonesia, the Philippines and Vietnam are on a single track but on equally dynamic mode. With a population of 200 million, Indonesia is a huge market. Not a day passes that Indonesian President Joko Widodo doesn’t try to energize the bureaucracy, government policies and private investments. He has repeatedly called on coalition partners to back him.
Likewise, Philippine President Rodrigo Duterte wants to carry on where his predecessor left off in ending the impact of the last two decades following the Marcos era, especially in raising business confidence and pursuing massive infrastructure investments that will link Manila with other cities and reduce income disparities.
Vietnam presents an interesting forward-looking approach as a single-tracker. It is a state-led economy, and its stakeholders are able to move as a pack and can fire all cylinders. This freedom affects everything from regulatory reforms and business-sector liberalization to infrastructure investment, tourism, and outward investment. In Asia, Vietnam is now the darling of investors.
Cambodia leans heavily on China for its economic advancement, which is also the result of economic liberalization. Many businesses there can be 100-percent foreign-owned. Phnom Penh is full of foreign banks enjoying minimal capital and regulatory requirements. Prime Minister Hun Sen’s approach appears to acknowledge that “the loss of some sovereignty” is outweighed by the economic benefits that can be derived from it. He would argue that Asean unity is less important in delivering wealth to Cambodia than its tango with China.
South Asia’s economic future is still shaped by India. The Modi government is determined to wrest control and realign fragmented Indian economic regulations in different states under a unified directive from Delhi. India will also see innovation from the long-tail technology business. Aviation reform and infrastructure spending are gathering pace.
Not to be outdone is Pakistan, with support from China’s “One Belt One Road” initiative, which provides a port and highway to the Arabian Sea. The Pakistani army is mulling over speeding up the work based on its engineering skills. Anything that can bring peace and tame terrorism would be a boon to the country. The same can be said of Bangladesh, as the world’s fast-moving garment and textile supply-chain hub.
North Asia is undergoing more of a reinvention on a global scale. Japan now pins its hopes on innovation in robotics, medicine, biotechnology, and renewable energy. The reinvention timeline will coincide with its hosting of the 2020 Olympics. Nonetheless, the Abe government has found the globalization of Japan an ongoing challenge.
South Korea comes on strong with its determination to build wealth around cultural exports. Its embassies worldwide place cultural diplomacy above all else in their external engagements. Its conglomerates have also started early on the “Internet of Things” to stay ahead in the global consumer electronics market.
Likewise, Taiwan is working on its niche competitiveness, focusing on its outstanding skills in machinery and mechanization. It never loses sight of any opportunity to own or create a global brand, as seen in the takeover of Sharp Corp.
China stands unique as a multitracker targeting rail networks and other infrastructure investments, the One Belt One Road initiative, e-commerce and financial technology, overseas takeovers, outward tourism and long-tail businesses that can ride the threat of a deflationary economy.
China’s foreign policy has propelled many strategic changes among Asian nations—alongside the forces of technology and global consumerism.
When Chinese Premier Li Keqiang told Asia News Network editors in Beijing that China’s status is still that of a developing country and not a mighty economic superpower, he was quite right. But with its state-led strategy, nationalistic ideals, 5,000 years of history and huge business-minded population, China’s economic thrust is fueled by its prowess and evokes awe from onlookers.
Pana Janviroj is executive director of Asia News Network, an alliance of 21 leading media in 19 Asian countries.
