As vaccination programmes around the world start to pick up, questions are being asked about ASEAN’s plans to bounce back from the COVID-19 pandemic, the new opportunities that lie ahead, and the obstacles that the region would face.
On 28 January 2021, the EU-ASEAN Business Council (EU-ABC) hosted our first webinar for the year titled: “ASEAN in 2021: Prospects and Challenges” with over 300 attendees. The session featured views from Professor Tommy Koh, Ambassador-at-Large, Ministry of Foreign Affairs, Singapore, The Hon. Ar. Yanty Rahman, Chairman of the ASEAN Business Advisory Council, Brunei, Adam Schwarz, Founding Partner and CEO of Asia Group Advisors, Joseph Incalcaterra, Chief Economist for ASEAN, HSBC, with Chris Humphrey, Executive Director for the EU-ABC, moderating the session.
Future of ASEAN is Optimistic, but it has its Challenges
The panellists expressed their optimism that ASEAN will experience a strong economic recovery in 2021 with a GDP growth forecast at around 5.2%. This is because ASEAN continues to be a highly competitive production base that is located near East Asia, a region that is experiencing strong economic recovery compared to other parts of the world.
ASEAN’s competitiveness stems from the huge economic potential of the Regional Comprehensive Economic Partnership (RCEP), the rising trend of the China +1 supply chain strategy, the boom in demand for semiconductor production due to increased work-from-home requirements, the increased investment opportunities for electric vehicle production, and a concerted effort by ASEAN governments to attract investments through domestic institutional reforms.
However, ASEAN still faces significant challenges that it must overcome. Such challenges include the increased risk of fiscal deficits due to COVID-19 stimulus packages, greater labour shortages due to COVID-19 infections, delays to economic recovery plans due to new outbreaks, and ensuring a comprehensive and smooth vaccination programme that would likely be fully achieved in 2022.
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*Document prepared by Ashley Koh, Research Intern of EU-ABC
For those whose missed the webinar, view it here
The team at EU-ASEAN Business Council expresses thanks to the excellent panel of speakers, without which the webinar would not have been possible.