Colleges

All About South East Asia (1)

Sungging Haryo Wicaksono

M10119803

National Taiwan University of Science and Technology

 

 

South East Asia region become more important in the past few decades since they enjoy stable economic growth, while rest of the world suffer a financial crisis [1]. Organization in South East Asia region, ASEAN (Association of South East Asia Nation) affirm commitment to establish integration in many aspect such as politic, security, culture, as well as in economic. Integration in economic will be implemented in ASEAN Economic Community (AEC) in 2015 [2].

By ASEAN Economic Community realization, South East Asia will be a single market and production base and not limited by countries territory. This realization will improve the competitiveness of economic in this region against the whole world. The movement of economic activity, including businessman, skilled and talented labour in the region will be easier [3].

Economic integration in ASEAN covered five core elements in terms of free flow activities, i.e. [3]:

(1) free flow of goods

(2) free flow of services

(3) free flow of investment

(4) free flow of capital

(5) free flow of skilled labour.

 

There are 12 sectors of industries in ASEAN Economic Community included in the single markets, i.e. [3]:

(1)          Agro-based product

(2)          Air travelling (Air Transportation)

(3)          Automotive Industries

(4)          e-ASEAN

(5)          Fisheries

(6)          Healthcare services

(7)          Rubber based product

(8)          Textiles and apparels

(9)          Tourism

(10)      Wood based products

(11)      Logistics

(12)      Food, agriculture, and forestry sectors

 

Most of South East Asian are developing countries (except Singapore and Brunei). Like most of developing countries trend, this regions have high positive population growth. As results, number of population in South East Asia Countries are relatively high compared with other countries.

 

 

Table 1.

Population Estimates in South East Asia 1980-2050 [4].

No.

Countries

Population (Million)

1980

1990

2000

2010

2025

2050

1 Brunei Darussalam

0.2

0.3

0.3

0.4

0.5

0.6

2 Cambodia

6.5

9.5

12.4

14.1

16.7

19

3 Indonesia

150.8

184.3

213.4

239.9

271.9

293.5

4 Laos

3.2

4.2

5.3

6.2

7.4

8.4

5 Malaysia

13.8

18.2

23.4

28.4

35.2

43.5

6 Myanmar/Burma

32.9

39.3

45

48

53.2

55.3

7 Philippines

47.1

61.6

77.3

93.3

118.1

154.9

8 Singapore

2.4

3

3.9

5.1

5.8

6.1

9 Thailand

47.5

57.1

63.2

69.1

72.9

71

10 Vietnam

54

67.1

78.8

87.8

99.3

104

  South East Asia

359

  445

524

593

683

759

  % of world pop.

8.1%

8.4%

8.6%

8.6%

8.5%

8.2%

 

 

In 2012, ASEAN population estimated to be more than 600 million people, about 8% of total world populations. Indonesia dominates the percentage of ASEAN populations with more than 40% of total populations. Huge population in this region provide a great market destinations, as well as labour force.

Labour force in ASEAN driven the industrial growth in the region. With 9% share of global populations, they provide huge amount of labour force. Indonesia labour force itself is almost equal to the United States. Combination of labour force between Indonesia, Philippine, Vietnam, Thailand, and Malaysia provide 255 million labour [5].

1

 

Figure 1. Labour Force in 5 ASEAN countries (million) [5]

During Asian Financial Crisis in 1997-1998 period, most of South East Asian countries suffered high rate of inflations and depreciate of their currency against US Dollars. In Indonesia, their economy dropped to -13% in 1998.  and rupiah (IDR) exchange rate fallen up to 20,000 per USD [6]. The similar condition also happens in Malaysia, Thailand, and The Philippines. However, it triggered an economic reform in each country. As the results, their economic continue to growth in a positive trend.

2

Figure 2. Comparison of GDP in Purchasing Power Parity (billion US dollar) between ASEAN and selected countries in 2011 (% represent GDP growth) [7].

 

ASEAN economic integrations play important role in the share of world GDP. In 2011, the combined GDP reached 3.3 billion US Dollars in terms of Purchasing Power Parity (PPP). The real economic growth in this region is the third highest (4.6 %) after China and India. Their economic size in was 30% of China and 22% of USA.
3

Figure 3. Comparison of annual GDP growth between ASEAN and selected countries [8].

In 2012, the whole ASEAN economy growth by 5.0% rose from 4.6% in the past year. Although the slower growth occurred in some countries, such as Cambodia, Indonesia, and Vietnam. Impact of global crisis weighted on Cambodia and Indonesia export. Political factor contributed to subdued growth in Vietnam, at about 5.0% compared with 5.9% in 2011 [9].

Philippine economy performance surpass Indonesia and became one of the best in this region, with GDP growth of 6.6% compared with 3.9 in the previous year, mainly improved by domestic consumption and increase of government expenditure. Thailand has rebounded from growth of 0.1% in 2011 to 6.4% in 2012, as it recovered from disruptions caused by floods.

In the recent years, tourism sector also become more and more important in many countries, including in South East Asia, It affect the economic growth and social progress, open many job opportunities and creation of the cooperation, and open a chance for revenue in foreign exchanges.

ASEAN region has more than enough assets to attract the tourist, from their stunning scenery in tropical region, diversity wildlife and rainforest, rich culture and history. If the total account of tourism in ASEAN combined, it will made up about 4.6 percent of total ASEAN GDP and 10.9 percent from indirect distribution. It’s create job opportunity for more than 9.3 million in ASEAN populations, or 3.2 percent of total labour force, and provide 25 million job opportunities from indirect contributions.

 

 

Table 2. Selected tourism and economic indicators for ASEAN members, 2011

4

 

Performance of tourism sector between ASEAN members is mixed. Some governments already support this sector very much. Based on table 2, it can be seen that standard deviation of rank are high. Malaysia has the most visitor numbers about 25 million annual tourist. In the other hand, although the Philippines has more populations (more than 100 million), only attract almost 4 million visitors in 2011. Form the point of view of GDP. Tourism sector account of 15% Cambodia’s GDP, but only 1% for Indonesia.

Big differences between political, economic, and demographic situations between each country become important assets to attract more tourists. For example, Singapore, the richest GDP per capita in ASEAN, are richer 80 times than the least developed countries in ASEAN (Myanmar). Indonesia, the 4 biggest countries in the world in terms of total populations, is 6000 times more populous than Brunei Darussalam. Indonesia and Philippines are archipelago countries which have second and third longest coastline in the worlds, respectively. While Laos is landblocked.

Based on the region’s strategic location, cultural  and natural heritage, diversity, tradition of tourism, and political will, T&T in ASEAN holds great potential. To increase the performance of tourism, ASEAN countries should make improvements in 14 pillars for tourism support, based on Travel and Tourism Competitiveness Index (TTCI), i.e.

(1)     Policy rules and regulations

(2)     Environmental sustainability

(3)     Safety and security

(4)     Health and hygiene

(5)     Prioritization of Travel & Tourism

(6)     Air transport infrastructure

(7)     Ground transport infrastructure

(8)     Tourism infrastructure

(9)     ICT

(10) Price competitiveness

(11) Human resources

(12) Affinity for Travel & Tourism

(13) Natural resources

(14) Cultural resources

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