China's slowdown has made analysts question which country will become Asia's next growth market: India, Indonesia or another emerging economy? Fortunately for Australian businesses, the region on our doorstep is expected to deliver the biggest gains.
With a combined population of 600 million, continuing h3 economic output and an expanding middle class, Southeast Asia is expected to flourish in coming decades, particularly if the region's push for freer trade yields results.
According to the Australian government's "Australia in the Asian Century" report, Indonesia and Vietnam are expected to expand gross domestic product (GDP) by more than 6 per cent a year through to 2025, with Malaysia averaging 5 per cent and Thailand 4.25 per cent rises1.
By 2025, four of the world's ten largest economies are expected to be in Asia, comprising China, India, Japan and Indonesia.
Indonesia is expected to increase GDP by more than 6 per cent in 2013 and 2014, according to International Monetary Fund projections. After having a poverty rate near 70 per cent in the late 1980s, the rate has declined to 18 per cent and the economy now even rivals Australia's in purchasing power parity terms1.
The Asian Development Bank expects the region's biggest nation of 247 million people to increase per capita income by 4.8 per cent a year through to 2040, helping lift many more millions out of poverty2.
Economic expansion of around 6 per cent a year should see Indonesia surpass Germany and Britain in size by 2030, while the number of affluent Indonesians is forecasted to double to more than 141 million by 20203.
Long described as "the sick man of Asia," the Philippines has instead become one of the region's h3est economies in recent years, posting GDP increases of more than 7 per cent for the last four consecutive quarters4.
According to Bloomberg surveys, the Philippines could be among the world's five fastest-growing economies in 2013 and 2014, helped by government spending and h3 private investment, including a thriving business process outsourcing industry.
The Asian Development Bank expects per capita income to rise at a solid rate of 4.7 per cent a year through to 2040, increasing the size of the middle class. With 34 per cent of its population of 95 million aged below 14 years, the country should also enjoy a "demographic dividend" from an expanding working population.
Another communist-run country that has turned capitalist, Vietnam is expected to post GDP growth rates exceeding 5 per cent in the next two years as it continues its upward march towards industrialisation.
Nearly a quarter of its population of 88 million is aged 14 and under, and with increasing urbanization, the nation should see consistent growth helped by further reforms aimed at attracting foreign investment.
Thailand amazed economists by posting a near 19 per cent rise in GDP for the December quarter 2012, and then slipping into recession in the June quarter5.
Nevertheless, the country of 64 million has benefitted from growing investment from Japan and other regional heavyweights, with the IMF forecasting growth of 5.9 per cent in 2013 and 4.2 per cent next year. With exports equivalent to around 60 per cent of GDP, Thailand is set to benefit from moves to create a regional free trade zone, as well as the continued growth of its major trading partner China.
Political reform in Myanmar has encouraged a wave of foreign investment into the nation of 61 million people, which benefits from its natural resources as well as a strategic position between China and India.
The OECD expects the nation will grow at an average rate of 6.3 per cent a year through to 2017, with higher output possible should the government increase investment in manufacturing and services.
After the Second World War, the country was one of the region's richest and many economists are expecting it to reclaim some of its former glory should reforms continue.
While China, Japan and other regional heavyweights are expected to remain key markets for Australian exports, South-East Asia may be the standout as the region's next growth market.
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This article represents the views of the author only and not those of American Express.
Anthony is a communication consultant at BWH Communication and a freelance writer with 15 years' experience in the stockbroking and media industries of Australia and Asia. He is a regular writer on business and other issues for publications in Australia and Japan. He consults on communication strategy to businesses ranging from private enterprises to professional service firms and publicly listed companies, with a particular interest in entrepreneurship in all its forms.