Southeast Asian economic outlook 2013 : with perspectives on China and India.

360 Pages·2013·13.373 MB·English

by  OECD

Southeast Asian Economic Outlook 2013
WITH PERSPECTIVES ON CHINA AND INDIA
Narrowing Development Gaps
The Southeast Asian Economic Outlook 2013: With Perspectives on China and India contains a medium-term
(five-year) economic outlook for Southeast Asia, China and India, a specific focus on narrowing development Southeast Asian
gaps and an assessment of national structural policy reforms and medium-term development plans. The report
highlights that economies in the region will maintain their overall dynamism in the next five years, supported by the
Economic Outlook 2013
growing strength of domestic demand. It also calls for greater efforts in the push for further social and economic
integration in Southeast Asia, in particular in the areas of poverty and human resource development.
WITH PERSPECTIVES ON CHINA AND INDIA
Contents
Part 1: Regional economic monitor
Chapter 1. Medium-term economic outlook for Southeast Asia, China and India: Prospects and assessments
Narrowing Development Gaps
Part 2: Structural policy country notes S
o
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Chapter 2. Structural policy challenges for Southeast Asian countries t
h
e
a
s
Part 3: Thematic focus: Narrowing development gaps t
A
s
Chapter 3. Overview of development gaps in Southeast Asia: Gaps between ASEAN-6 and CLMV countries ia
n
Chapter 4. Integrating CLMV countries through trade and investment E
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Chapter 5. Poverty and inequality disparities in Cambodia, Lao PDR, Myanmar and Viet Nam n
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Consult this publication on line at http://dx.doi.org/10.1787/saeo-2013-en. N
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This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. IN
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Visit www.oecd-ilibrary.org for more information. IA
ISbN 978-92-64-18076-5
41 2013 01 1 P

Southeast Asian
Economic Outlook
2013
WITH PERSPECTIVES ON CHINA AND INDIA
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Fore
wForewoord rD
Is this the Asian century? Emerging Asia has experienced remarkable economic
growth and a steadfast recovery from the global crisis. According to this new edition
of the OECD Southeast Asian Economic Outlook, a number of fast growing Southeast Asian
economies, as well as China and India, will maintain their overall dynamism in the
next five years. Strong economic performance will be essential for achieving sustained
improvements in living standards and laying the foundations for more inclusive societies.
Over the medium term, Asia’s economic prowess will be supported not only by strong
export performance, which has been a powerful driver of growth in the region, but also
by the growing strength of domestic demand. In particular, private consumption and
investment will become the main engines of growth in many ASEAN countries. Indeed,
several large infrastructure projects are being undertaken and social policies are being
strengthened in a number of Southeast Asian economies. An expansion of the middle
class will also likely provide further impetus for domestic demand-led growth in the
region.
However, Southeast Asian governments need to take further action to narrow the
region’s considerable social and economic disparities and to sustain robust growth. This
third edition of the Southeast Asian Economic Outlook has therefore a special thematic
focus on narrowing development gaps in Southeast Asia, addressing disparities both
within and among countries. The report emphasises that development gaps go beyond
poverty and income inequality, and encompass several non-monetary dimensions,
including infrastructure, tourism, trade and investment, as well as information and
communication technology. The report also calls for continued efforts to fight poverty
and promote human resource development.
This publication is the result of close collaboration between the OECD Development
Centre and the ASEAN Secretariat in Jakarta. It will contribute to inform the debate on
the key policy requirements and challenges to reduce development gaps and promote
further economic and social integration in the region.
The OECD is committed to supporting Asian countries in their efforts to promote
economic and social well-being through rigorous analysis, peer learning and best
practices.
November 2012
Angel Gurría
OECD Secretary-General
SOUTHEAST ASIAN ECONOMIC OUTLOOK 2013: WITH PERSPECTIVES ON CHINA AND INDIA © OECD 2013 3

acknow
lackenowDledggemeentsments
The 2013 edition of the Southeast Asian Economic Outlook: With Perspectives on
China and India was prepared by the Asia Desk of the OECD Development Centre in
Paris, in co-operation with the ASEAN Secretariat in Jakarta.
The team was led by Kensuke Tanaka, Head of the Asia Desk and overall guidance
was provided by Mario Pezzini, Director and Carlos Alvarez, Deputy Director of the OECD
Development Centre. The volume was drafted by a team composed of Kensuke Tanaka,
Stephanie Mak, Kiichiro Fukasaku, Charles Pigott, Pang Eng Fong, Aladdin D. Rillo,
Pitchaya Sirivunnabood and Rony Soerakoesoemah. Gabor Fulop managed statistical
work related to the report. Dadan Kardiana and Kenji Sato provided able assistance to
the team. The structural policy country notes were prepared by the OECD Development
Centre in collaboration with experts in the region. We thank Florian Alburo, Quah Boon
Huat, Somchai Jitsuchon, Kong Ratha, Nuntaporn Methakunavut, Nguyen Tu Anh and
Tan Kim Song for their significant inputs. Charles Pigott and Ken Kincaid provided
extensive editorial advice on the draft. Administrative support provided by Elisabeth
Turner was highly appreciated.
The OECD-ASEAN Narrowing Development Gap Indicators (NDGIs), introduced in
this volume, were prepared by a joint team from the OECD Development Centre and
the ASEAN Secretariat. We thank Elizabeth Alarilla and Agus Sutanto of the ASEAN
Secretariat for their co-operation.
This publication benefited from discussions with experts at the OECD Regional
Seminar on Narrowing Development Gaps in Southeast Asia in Seoul in Febuary 2012
and the inaugural OECD-AMRO (ASEAN+3 Macroeconomic Research Office) Joint
Asian Regional Roundtable in Singapore in September 2012. The authors are grateful
to Phouphet Kyophilavong, Hong-Eng Lim, Satoshi Nakagawa, Yoichi Nemoto, Zakariah
Abdul Rashid, Reza Yamora Siregar, Matthew Yiu and Lee Jae Young.
The Outlook was presented at the ASEAN Business and Investment Summit in
Phnom Penh, Cambodia, in November 2012. The Development Centre would also like to
express special thanks to the Government of Cambodia, the Ministry of Commerce and
in particular, Minister Prasidh Cham for hosting the launch event at the Summit.
A large number of government and central bank officials and experts in Southeast
Asian countries were involved in successive consultations during OECD Development
Centre missions, seminars and meetings. Particular thanks go to Juda Agung, Armida
S. Alisjahbana, Irfa Ampri, Aris Ananta, Allauddin Bin Anuar, Jose Marin Arcas, Abu
Zeid Mohd Arif, Suwannee Arunsawadiwong, Myrna Clara B. Asuncion, Zainon Bt
SOUTHEAST ASIAN ECONOMIC OUTLOOK 2013: WITH PERSPECTIVES ON CHINA AND INDIA © OECD 2013 5
ACKNOWLEDgEMENTS
Bakar, Prijambodo Bambang, Wichayayuth Boonchit, Bui Tat Thang, David W. Carbon,
Cao Manh Cuong, Chea Chantum, Naris Chaiyasoot Chulamanee Chartsuwan, Antonio
Cintura, Francis Dakila, Dao Thuy Hang, Doan Phuong Lan, Rosemarie Edillon, Emmanuel
Esguerra, MD. Farishzanismal, Pandu Rizky Fauzi, Chuntitom Sam Gongsakdi, Thurgha
Govindasmy, Diwa C. Guinigundo, Teresa Habitan, Andin Hadiyanto, Nik Mohd
Shariffudin Nik Hassan, Hoang Thi Phuong, Shruthi Jayaram, Suchat Katima, Khuong
Thanh Ha, Ampon Kittiampon, Syahrial Loetan, Mai Huong Plenong, Nik Azman Nik
Abdul Majid, Mohd Esa Abd Manaf, Agus Martowardojo, Andie Megantara, Ravi Muthayah,
Don Nakornthab, Mulia P. Nasution, Nguyen Thi Lan Huong, Nguyen Duc Long, Nguyen
Duc Thanh, Nguyen Thi Thu Hien, Pilanya Niyomthai, Marzunisham bin Omar, Kennedy
Mayoung Onon, Nadsirah Osman, Phan Ngoc Mai Phuong, Pradit Phataraprasit, Bambang
Prijambodo, Dian Ediana Rae, Muhammad Bin abd Rahaman, Sjamsu Rahardja, Chadin
Rochananonda, Seilava Ros, Purbaya Yudhi Sadewa, Goh Chin Siong, Mahendra Siregar,
Salmet Seno Adji, Thammanoon Sodsrichai, Margarita R. Songco, Nurulashikin Suid,
Sugeng, Ceppie Sumadilaga, Wismana Adi Suryabrata, Syaifullah, Tan Kok Kong, Pattama
Teanravisitsagool, Jason Teo, Arkhom Termpittayapaisith, Leonard Thampubolon, Thia
Jang Ping, Charmeida Tjokrosuwarno, Tran Anh Vu, Tran Dinh Thien, TRANG Thu Vu,
Ma. Cyd n. Tuano-amador, Soraphol Tulayasathien, Suthirat Vansrisawasd, Porametee
Vimolsiri, Vo Tri Thanh, Piang-or Wacharaprapapong, Perry Warjiyo, Ajaree Wongwan,
Anugrah E. Yogyantoro, Maziah Binti Che Yusoff, Saharudin Yusoff, Baoliang Zhu, Kun
Zhao and Doddy Zulverdi.
The team of this report would like to acknowledge the comments received from
several research institutes in Asia, in particular the Economic Research Institute for
ASEAN and East Asia (ERIA), the Malaysian Institute of Economic Research (MIER), the
Thailand Development Research Institute Foundation (TDRI) and the Central Institute
for Economic Management (CIEM), Viet Nam.
Support from OECD delegations and embassies of ASEAN countries in Paris, in
particular Ambassador Stefan Flückiger, Ambassador Kyung Wook Hur and Ambassador
Motohide Yoshikawa, as well as Winston Almeda, Deena Amatong, Astana Abdul Aziz,
Jai-chul Choi, Tsutomu Himeno, Wasana Honboonheum, Daniel Koh, Tran Phan Linh, Ly
Van Anh, Kumiko Nada, Yukiko Okano, Jungoh Park, Rosalita Prospero, Chanol Rith and
Tri Tharyat is gratefully acknowledged.
The Asian Business Cycle Indicators (ABCIs) and the 2013 version of the Medium-term
Projection Framework for Growth and Development (MPF-2013) used in this publication
were prepared by a team managed by Kensuke Tanaka and composed of Gabor Fulop,
Yoki Okawa and Masakazu Someya.
Elizabeth Nash, Aida Buendia, Louise Schets, Erik Cervin-Edin, Vanda Legrandgérard,
Jane Marshall and Diana Klein turned the manuscript into the publication. Aida Buendia
designed the cover page of the publication and special thanks go to Elizabeth Nash
for her substantial contributions. Elodie Masson, media and press relations, provided
excellent support.
Last but not least, the OECD Development Centre would like to acknowledge gratefully
the financial support received from the governments of Japan, Korea and Switzerland.
6 SOUTHEAST ASIAN ECONOMIC OUTLOOK 2013: WITH PERSPECTIVES ON CHINA AND INDIA © OECD 2013
table oF
ctabloe of cnontetnts ents
Acronyms and abbreviations ...................................................................................................................15
Preface .........................................................................................................................................................17
Executive summary ..................................................................................................................................19
overview .....................................................................................................................................................23
Part 1. Regional economic monitor ..................................................................................................23
Part 2. Structural policy country notes............................................................................................30
Part 3. Thematic focus: Narrowing development gaps .................................................................33
Part one: regIonal economIc monItor ......................................................................................39
Chapter 1. medium-term economic outlook for southeast asia, china and India: Prospects and
assessments ................................................................................................................................................41
Introduction .........................................................................................................................................42
Overview and main findings: The economic outlook for 2013-17 ...............................................42
Near-term macroeconomic developments and prospects ...........................................................45
Medium-term prospects: Greater reliance on domestic demand for growth ...........................64
Key policy challenges to sustaining healthy growth in the medium term ...............................73
Conclusion ...........................................................................................................................................110
Notes ....................................................................................................................................................111
Bibliography .......................................................................................................................................113
Part two: strUctUral PolIcY coUntrY notes ......................................................................117
Chapter 2. structural policy challenges for southeast asian countries .........................................119
Synopsis of structural policy challenges in Southeast Asia .................................................120
Cambodia .......................................................................................................................................123
Indonesia .......................................................................................................................................138
Malaysia .........................................................................................................................................158
Philippines .....................................................................................................................................175
Singapore .......................................................................................................................................190
Thailand .........................................................................................................................................204
Viet Nam ........................................................................................................................................219
Bibliography ..................................................................................................................................235
SOUTHEAST ASIAN ECONOMIC OUTLOOK 2013: WITH PERSPECTIVES ON CHINA AND INDIA © OECD 2013 7
TAbLE Of CONTENTS
Part tHree: tHematIc FocUs: narrowIng DeVeloPment gaPs........................................239
Chapter 3. overview of development gaps in southeast asia: gaps between asean-6 and
clmV countries ........................................................................................................................................241
Introduction and key findings .........................................................................................................242
Infrastructure ....................................................................................................................................249
Human resource development ........................................................................................................256
Information and communication technology (ICT) .....................................................................268
Trade and investment (regional economic integration) .............................................................271
Tourism ...............................................................................................................................................277
Poverty ................................................................................................................................................280
Conclusion ..........................................................................................................................................286
Notes ...................................................................................................................................................287
Bibliography .......................................................................................................................................288
Chapter 4. Integrating clmV countries through trade and investment ........................................291
Introduction: CLMV economies on the move ...............................................................................292
The emergence of a trade-FDI nexus .............................................................................................293
Entering the global market ..............................................................................................................299
Managing the next phase of reform and integration ..................................................................309
Conclusions ........................................................................................................................................313
Appendix ............................................................................................................................................315
Notes ...................................................................................................................................................323
Bibliography .......................................................................................................................................325
Chapter 5. Poverty and inequality disparities in cambodia, lao PDr, myanmar
and Viet nam ...........................................................................................................................................329
Introduction .......................................................................................................................................330
The CLMV experience of poverty and inequality – country by country ..................................332
CLMV countries compared ..............................................................................................................348
Conclusion ..........................................................................................................................................350
Bibliography ........................................................................................................................................351
statIstIcal anneX ..............................................................................................................................353
tables
overview
0.1. Real GDP growth of Southeast Asia, China and India ............................................................24
0.2. Southeast Asian countries’ indirect trade exposure to G3 ....................................................25
0.3. Medium-term development plans of Southeast Asian countries ........................................30
0.4. Summary of medium-term policy challenges and responses in Southeast Asia ..............31
chapter one
1.1. Real GDP growth of Southeast Asia, China and India ............................................................43
1.2. Southeast Asian countries’ direct and indirect trade exposure to G3 ................................58
1.3. Estimated impact of capital inflow bonanzas on the probability of domestic
credit booms in Asia ....................................................................................................................76
8 SOUTHEAST ASIAN ECONOMIC OUTLOOK 2013: WITH PERSPECTIVES ON CHINA AND INDIA © OECD 2013