Advance has welcomed the release of the Southeast Asia Economic Strategy to 2040, a comprehensive strategy to tap into the potential that lies within the region’s dynamic economies. Spearheaded by the Special Envoy for Southeast Asia, Nicholas Moore AO, the strategy outlines a road map for Australia and Southeast Asia to bolster their economic ties and foster mutual prosperity.
Importantly, the strategy notes that business exchanges, diaspora and alumni will all have a critical role to play in building awareness in Australia and Southeast Asia of each other’s markets and offerings. As part of Advance’s commitment to reinforcing Australia’s engagement with Southeast Asia, Advance has proposed the following initiatives:
- Establish a Permanent Leaders Network: This network will facilitate two-way communication with influential Australians driving Southeast Asian initiatives. It will serve as a valuable sounding board for consultation and a means to effectively communicate Australian messages in the region.
- Collaboration with On-the-Ground Organisations: We will work closely with on-the-ground Australian organisations, including AustChams, business councils, and diplomatic posts, to deliver high-quality Australian content that informs and nurtures two-way trade and investment opportunities.
- Engage Stakeholders through Summits: Advance will organise Summits to engage a wide range of stakeholders and gather thought leadership on topics and audiences targeted under the Strategy.
With these efforts, Advance aims to strengthen the personal and professional ties linking individuals and businesses in Australia and Southeast Asia. Key points from the strategy are summarised below.
The Southeast Asia Opportunity
Southeast Asia is more than just a promising region; it’s at the very heart of global growth. Here’s some of the reasons why:
Economic Powerhouse: In 2022, Southeast Asia’s combined Gross Domestic Product (GDP) exceeded that of economic giants like the UK, France, and Canada. Astonishingly, it was twice the size of Australia’s economy. The region’s GDP is projected to grow at an impressive rate of around 4% annually until 2040, while developed economies are expected to average only 1 to 2% growth.
Demographic Advantage: Southeast Asia boasts a youthful population, with 55% of its 687 million people under the age of 35. This demographic dividend creates a substantial productive workforce that will drive growth well into 2040.
Expanding Middle Class: The middle class in Southeast Asia, currently numbering at least 190 million people, is set to expand further. This burgeoning middle class will demand higher-value products and services, creating lucrative opportunities in various sectors, including healthcare, education, financial technology, and premium food and beverages.
Australia’s Role in Southeast Asia’s Success
Australia has a rich history of economic collaboration with Asia. From Japan to China, Australia has benefited from and contributed to the growth and stability of the region. Southeast Asia represents another significant opportunity for Australia to thrive:
Reliability as a Supplier: Australia can serve as a dependable supplier of commodities, including agriculture, minerals, and energy, meeting the region’s growing demands.
High-Quality Services: Particularly in the realm of university education, Australia excels, attracting students from Southeast Asia and delivering top-notch education.
Infrastructure and Green Initiatives: Australia can play a pivotal role in meeting Southeast Asia’s infrastructure and green energy transition needs, where substantial investments are required.
SMEs: SMEs are engines of innovation and employment, and are set to play a crucial role in this economic partnership.
Reciprocal Opportunities and Trade Growth Potential
Australia isn’t just looking to benefit from Southeast Asia; it’s also offering opportunities in return. Australia’s own economic size, growth record, skilled workforce, and emerging needs provide a fertile ground for increased Southeast Asian exports and investments in Australia.
Trade Growth Potential: If two-way trade continues to grow at a 20-year compound average growth rate of 5.5%, total trade with Southeast Asia would reach A$465 billion by 2040—an increase of A$287 billion. If trade growth could be boosted to 6.3%, total trade would triple by 2040.
Infrastructure and Green Investment: Southeast Asia is expected to require a staggering $3 trillion in infrastructure investment by 2040, offering significant opportunities for Australian investors, especially in green initiatives.
Strategic Actions to Realise Commercial Potential
The strategy outlines four categories of actions:
1. Raise Awareness: Strengthening Southeast Asia literacy, business missions, and tourism promotion.
2. Remove Blockages: Addressing barriers, reducing regulatory burdens, and prioritising trade agreements.
3. Build Capability: Enhancing skills, facilitating training, and supporting businesses.
4. Deepen Investment: Promoting economic growth through strategic investment and research.
A total of 75 general and sector-specific recommendations are presented for consideration, aimed at strengthening the economic relationship between Australia and Southeast Asia. These recommendations include:
- Developing a comprehensive plan to strengthen Southeast Asia literacy.
- Establishing an Australia-Southeast Asia business facilitation initiative.
- Collaborating with states, territories, and businesses to promote Australia.
- Initiating an ASEAN trade, investment, and tourism promotion campaign.
- Engaging with Australia’s Southeast Asian diaspora to deepen SME business links.
- Investing in education promotion across Southeast Asia.
- Expanding tourism promotion and reducing regulatory burdens.
- Reviewing and upgrading FTAs and enhancing cooperation on trade rules.
- Prioritising air services agreements and qualifications recognition.
- Supporting Australian First Nations businesses and alumni engagement.
- Establishing a strategic investment facility and Austrade Landing Pads for tech companies.