Southeast Asia Regains Old Shine
BANGKOK (DPA) - Southeast Asia's tiger economies, the darlings of foreign investors in the 1980-90s, have been in the shadow of fast-growing giants China and India for the past decade. But impressive recoveries this year, with the implementation of free trade agreements and the threat of rising labor costs in China, make the regional cubs start to look cute again.
"It's not completely new that Southeast Asia is also doing well, but for a long time the region had been basically forgotten because people were so concentrated on China and India,'' said Stefan Buerkle, president of the German-Thai Chamber of Commerce. The latest global crisis has made all of Asia look good.
Asia is expected to grow 7.5 percent in 2010, led by China (10.5 percent), India (9.4 percent) and the 10 Southeast Asian economies expected to grow by a collective 6.4 percent, the International Monetary Fund said.
The impressive growth rates start from a low base, as the entire region was hard-hit by the global recession in 2009 when demand for Asian exports shrank. A surge in export demand in the US and Europe, their traditional markets, provided an immediate impetus for growth, although that demand is forecast to slow in the second half of 2010 and in 2011.
Southeast Asia's export-led economies have performed even better than expected. Singapore expects growth of 13 to 15 percent this year; Thailand, despite its political problems, 7 to 8 percent; Vietnam 6.5 percent and Indonesia and Malaysia at least 6 percent. Foreign direct investment (FDI) is likewise on the upswing.
Indonesia, the region's biggest domestic market with a population of 240 million, saw foreign and domestic investment rise 40 percent in the second quarter year-on-year, while Vietnam's FDI inflow in the first half of this year jumped 5.9 percent from the same period in 2009 to $5.4 billion.
Malaysia's FDI inflow in the first quarter reached $1.65 billion, more than the $1.38 billion it attracted in all of 2009. Thailand saw new applications for foreign investment tax privileges grow 7.4 percent to $5.9 billion worth of projects in the first half of 2010. …