The writer is CEO of AsiaBIZ Strategy, a Singapore-based consultancy that provides Asian market research and investment/trade promotion services

The Asian Development Bank expects the 10-country Association of Southeast Asian Nations (Asean) bloc to grow by 4.7% in 2024, sustained by large and fast-growing economies like Indonesia, Philippines, Malaysia and Vietnam. Demand for these countries’ raw materials and finished goods is supported by the big, nearby consumer markets of China and India. Stronger regional growth will also attract inward investment, especially in electric vehicles (EV) and components, cleantech, renewables, and its electronics sector, which benefits from readjusting supply chains.

Regional trade partnerships like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Regional Comprehensive Economic Partnership and Asean Free Trade Agreement boost the bloc’s exports and intra-regional movement of goods and human capital. Indonesia, Asean’s largest economy, is now in accession talks with the OECD and continues to attract FDI in base metals mining and processing, and EV battery manufacturing, with Vinfast and BYD both recently announcing multi-billion dollar investments.

Prabowo Subianto, Indonesia’s president-elect, is anticipated to continue the stable economic policies of his predecessor Joko Widodo. Now, 18 months into his administration, the Philippines’ president Ferdinand ‘Bongbong’ Marcos Junior is focused on political and social unity, and achieving 6% economic growth. Malaysia’s prime minister, Anwar Ibrahim, is rolling out new initiatives like the Industrial Master Plan 2030 and National Energy Transition Roadmap, and recently added a new Digital Ministry to lead the government’s digital transformation.  

Asia’s tier 1 powerhouses are undoubtedly China and India. However these three factors mean Asean will continue growing over the next decade and is set to become the region’s tier-two economic powerhouse.

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This article first appeared in the April/May 2024 print edition of fDi Intelligence.