ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2021 reallocating resources for... digitalisation.

205 Pages·2021·4.217 MB·English

by  ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT: DEVELOPMENT CENTRE.

Economic Outlook for Southeast
Asia, China and India 2021
REALLOCATING RESOURCES FOR DIGITALISATION
2 021

Economic Outlook
for Southeast Asia, China
and India
2021
REALLOCATING RESOURCES FOR DIGITALISATION
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and
arguments employed herein do not necessarily reflect the official views of the member countries of the OECD or its
Development Centre.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over
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Please cite this publication as:
OECD (2021), Economic Outlook for Southeast Asia, China and India 2021: Reallocating Resources for Digitalisation, OECD
Publishing, Paris, https://doi.org/10.1787/711629f8-en.
ISBN 978-92-64-90151-3 (print)
ISBN 978-92-64-38107-0 (pdf)
Economic Outlook for Southeast Asia, China and India
ISSN 2310-1105 (print)
ISSN 2310-1113 (online)
Photo credits: Cover design by Mélodie Ly Descours (OECD Development Centre) on the basis of images from © Shutterstock.com.

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Foreword

the Economic Outlook for Southeast Asia, China and India is a regular publication on asia’s
regional economic growth, development and regional integration processes. It focuses on
the economic conditions of the association of Southeast asian Nations (aSeaN) member
countries (Brunei darussalam, cambodia, Indonesia, lao pdr, Malaysia, Myanmar, the
philippines, Singapore, thailand and Viet Nam) and two large economies in the region,
china and India. Beginning with the first release of the Update of the Outlook in 2018,
following the Special Supplements of the 2016 and 2017 editions, the Outlook has become
a biannual publication to ensure that the projections, data and analysis remain current
and useful. this publication evolved from the Southeast asian economic Outlook.
the Outlook was initially proposed at an informal reflection group on Southeast
asia in 2008 as a follow-up of the council Meeting at Ministerial level (McM) in 2007 and
was accepted by ministers and senior officials from aSeaN countries at the occasion of
the 2nd Oecd Southeast asia regional forum in Bangkok in 2009. the Outlook project
was officially launched in 2010 and each edition is regularly presented at the occasion
of the aSeaN/east asia Summit. It was included in the Oecd’s Southeast asia regional
programme (Searp) at the Steering group Meeting in Jakarta, Indonesia in March 2015,
with its role of providing a horizontal view of activities, identifying emerging trends in the
region and providing a backbone for the different streams of the programme confirmed
at the 2015 McM. the Outlook serves as a strategic foresight and policy dialogue tool for
the Searp. the Outlook consultation group (Ocg) was established in 2014 with Oecd
delegations and embassies of asian countries in paris.
this edition of the Outlook is composed of two main parts, each highlighting a particular
dimension of recent economic developments in the region. the first chapter presents the
regional economic monitor, depicting the economic outlook and macroeconomic challenges
in the region. the second chapter focuses on reallocating resources for digitalisation in
response to cOVId-19. the pandemic has intensified the importance of digital health and
digital education, and these sectors require further development. policy makers need to
address the existing barriers. to facilitate digital health, clear regulations are necessary to
ensure quality health care and strong compliance with rules on data protection. Health care
professionals must also be trained to master the use of digital tools. In digital education,
strengthening teachers’ digital skills and maintaining quality education in a remote setting
are necessary. furthermore, infrastructure will need to be improved and the benefits of
digital health and digital education need to be equitably distributed. the pandemic has
also accelerated the fourth industrial revolution. Industry 4.0 technologies have allowed
firms to stay responsive to market needs. Several countries in emerging asia have taken
initiatives to support digitalisation during the pandemic but a number of challenges will
need to be addressed for a broader adoption of Industry 4.0. the most frequently cited
bottlenecks include lack of adequate infrastructure, as well as digital awareness and
financial limitations, notably for smaller firms. greater regional co-operation is necessary
to respond to cyber threats and to strengthen cyber resilience in emerging asia.
the Oecd development centre is committed to working alongside governments
of developing and emerging economies and regional actors to identify key areas of
intervention in order to address these challenges. the centre enjoys the full membership
of three Southeast asian countries, namely Indonesia, thailand and Viet Nam, as well
as china and India. this project has also benefited from the generous support of other
emerging asian countries.
the Oecd is committed to supporting asian countries in their efforts to promote
economic and social well-being through rigorous analysis, peer learning and the sharing
of best practices.
ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2021: REALLOCATING RESOURCES FOR DIGITALISATION © OECD 2021 3

Acknowledgements
the Economic Outlook for Southeast Asia, China and India 2021 – Reallocating Resources for
Digitalisation was prepared by the asia desk of the Oecd development centre. the team
was led by Kensuke tanaka, Head of the asia desk and valuable guidance was provided
by Mario pezzini, director of the Oecd development centre and Special advisor to the
Secretary-general on development. the publication benefited from discussions with
regional partners, including the aSeaN Secretariat, aSeaN+3 Macroeconomic research
Office (aMrO), the asian development Bank (adB), the asian development Bank Institute
(adBI), and the economic research Institute for aSeaN and east asia (erIa).
this volume was drafted by a core team composed of Kensuke tanaka, prasiwi Ibrahim,
raluca Maran, alexander Hume, rahmalia devita and lurong chen. antti raukola, Karin
Hansson, david repeta, Yan Meng, Sybrand Brekelmans, Oudom Hean, Ilhame lagrine and
Yuanita Suhud provided significant contributions. Muhamed Zulkhibri abdul Majid and
Joy Blessilda Sinay provided useful inputs. Sonja Marki provided valuable administrative
support for this project. delphine grandrieux, elizabeth Nash, anne thomas, Melodie
descours and Studio pykha turned the manuscript into the publication.
the Outlook 2021 benefited from discussions with Oecd delegations at two Outlook
Consultation Group (OCG) meetings in february 2020 and december 2020 in paris, led by
co-chairs of this consultation group, ambassador Nguyen thiep and christoph graf. The
Outlook also benefited from discussion with experts in the region at the 8th Asian Regional
Roundtable on Macroeconomic and Structural Policies, jointly organised by aMrO, adB, adBI,
erIa and the Oecd development centre, in tokyo on 13-14 february 2020. the authors are
grateful to Naoyuki Yoshino, dean of the adBI, toshinori doi, director of aMrO, Hidetoshi
Nishimura, president of erIa, chul Ju Kim, Nella Hendriyetty, Yumiko Murakami, Koji
Hachiyama, abdul abiad, reza anglingkusumo, Ho Sui Jade, patrick Hess, aladdin rillo,
as well as porametee Vimolsiri, g.a. diah Utari, Matteo fumerio, Samantha Hung and
James Villafuerte.
Support from Oecd delegations and embassies of asian countries in paris, in
particular, ambassador Hyoung Kwon Ko and deputy permanent representative Heesang
Kim, ambassador Sarun charoensuwan, ambassador dato’ azfar Mohamad Mustafar,
ambassador Kyaw Zeya, ambassador Zainal Mantaha, thi Van anh Nguyen, Nguyen tan
Van, Yoonrae park, Hye Won Kim, taro fujii, akane Nozawa, Sasilada Kusump, Sherwin
loh, rudjimin, andre Bramantya, Hans Siriban, premanand Jothy, Syed Nizamuddin Sayed
Khassim, Morakot Vongxay, Zaidah Shahminan, Mang Hau thang, phe grace Mee, Sokan
Oum, Sonisa eat, Olivia tanner, corentin droz-georget, is gratefully acknowledged; as are
contributions from the european commission.
last but not least, the Oecd development centre would like to express deep
appreciation for the financial support received from the governments of Japan, Korea and
Switzerland, and the european Union.
ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2021: REALLOCATING RESOURCES FOR DIGITALISATION © OECD 2021 5

Table of contents
Acronyms and abbreviations ....................................................................................................................................................13
Executive summary .........................................................................................................................................................................17
Overview .................................................................................................................................................................................................19
Chapter 1. Macroeconomic assessment and economic outlook in Emerging Asia .............................47
Introduction ...................................................................................................................................................................................48
Overview and main findings...............................................................................................................................................49
recent developments and near-term outlook ..........................................................................................................54
financial markets have stabilised, but vulnerabilities persist .....................................................................80
pressure on bank balance sheets could intensify ..................................................................................................83
current account imbalances will widen as trade and tourism take time to recover .............................84
rebound in chinese economy benefits aSeaN exports ...................................................................................87
Inflationary pressures remain low due to ongoing slack in the economy .............................................89
labour markets suffer biggest blow in decades due to health crisis .......................................................91
digital transactions in emerging asia surpass expectations .......................................................................95
risks to growth and policy challenges in light of cOVId-19 ..........................................................................99
conclusion ....................................................................................................................................................................................121
Note ..................................................................................................................................................................................................122
references ....................................................................................................................................................................................122
Chapter 2. Reallocating resources for digitalisation in response to COVID-19: Health,
education and Industry 4.0 .............................................................................................................................133
Introduction ................................................................................................................................................................................134
digital health tools are helping the response to the pandemic .................................................................134
Online education in emerging asia requires an upgrade in digital skills...........................................153
accelerating Industry 4.0 in the post-cOVId-19 era .........................................................................................171
conclusion ....................................................................................................................................................................................188
Notes ................................................................................................................................................................................................189
references ....................................................................................................................................................................................189
Annex A. Statistical annex ......................................................................................................................................................201
Figures
1. Stringency of cOVId-19-related restrictions in emerging asian economies .............................19
2. contribution by demand and supply-side components to real gdp growth
in aSeaN-5 economies, 2018-20 ..............................................................................................................................20
3. private consumption behaviour in the aftermath of selected natural disasters
in thailand and the philippines ..............................................................................................................................21
4. change in benchmark stock price indices and spreads to 10-year US treasuries
of selected emerging asian economies, 2020-21 ...........................................................................................22
5. level and change in private and public sector debt in selected
emerging asian economies, 2020............................................................................................................................22
6. total exports of selected aSeaN economies by destination, Q1-Q2 2020 ....................................23
7. changes in unemployment around recession periods in selected
aSeaN economies, 1991-2020 ....................................................................................................................................24
ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2021: REALLOCATING RESOURCES FOR DIGITALISATION © OECD 2021 7
taBle Of cONteNtS
8. Increasing e-commerce penetration and average revenue per user, 2019-20 ............................25
9. Monetary policy actions in selected emerging asian economies, 2020 .........................................28
10. average impact of the afc and gfc on the natural rates of interest
of Indonesia and thailand ...........................................................................................................................................30
11. total amount of fiscal packages and estimated impact on the fiscal balance
of selected aSeaN economies ...................................................................................................................................31
12. Sovereign debt maturity profile and government debt held by external creditors
in selected emerging asian economies ..............................................................................................................32
13. daily active users of telemedicine platforms in Indonesia
and Singapore, March 2020 .........................................................................................................................................33
14. Interest in telehealth and cumulative confirmed cases of cOVId-19 in selected aSeaN
economies, february-November 2020 ..................................................................................................................34
15. Internet usage by level of education and income in selected emerging
asian economies, 2019 ...................................................................................................................................................36
16. School closure policies in emerging asia, January to November 2020 ...........................................37
17. global mobile education app downloads, Q1 2017 to Q1 2020 ..............................................................38
18. Keyword search trends related to selected national learning platforms, 2020 .........................38
19. fixed broadband subscriptions and speed in selected emerging asian economies .....................40
20. annual installations of industrial robots and robot density, 2019 ....................................................43
1.1. real gdp growth of Southeast asia, china and India................................................................................49
1.2. Impact of large natural disasters on gdp growth in the philippines and thailand ..............54
1.3. Stringency of cOVId-19-related restrictions in emerging asian economies ............................56
1.4. cumulative confirmed cases of cOVId-19 in emerging asia ................................................................56
1.5. contribution to gdp growth in Indonesia, 2018-20 .....................................................................................57
1.6. contribution to services growth in Indonesia, 2019-20 ............................................................................58
1.7. consumer confidence indices in Indonesia, Malaysia, philippines and thailand......................58
1.8. projected gains from cptpp and rcep versus gains/losses from US-china trade conflict
of selected signatory countries ................................................................................................................................60
1.9. contribution to gdp growth in Malaysia, 2018-20 .......................................................................................61
1.10. contribution to services growth in Malaysia, 2019-20 ..............................................................................61
1.11. Industrial production index in Malaysia and Viet Nam, 2017-20 ......................................................62
1.12. Breakdown by holder sector of securities issued by the Malaysian government ....................63
1.13. contribution to gdp growth in the philippines, 2018-20 .........................................................................64
1.14. Manufacturing and services in selected aSeaN economies, 2016-20 .............................................65
1.15. contribution to gdp growth in thailand, 2018-20 .......................................................................................66
1.16. contribution to total export growth in thailand, 2020 ............................................................................66
1.17. contribution to gdp growth in Viet Nam, 2018-20 ......................................................................................67
1.18. contribution to industrial sector growth in Viet Nam, 2019-20 ..........................................................68
1.19. contribution to gdp growth in Brunei darussalam, 2018-20 ...............................................................69
1.20. contribution to industrial sector growth in Brunei darussalam, 2019-20 ...................................69
1.21. contribution to gdp growth in Singapore, 2018-20 .....................................................................................70
1.22. contribution to services growth in Singapore, 2019-20 ...........................................................................71
1.23. green bond issuance by new issuers in selected aSeaN economies, January-august 2020 ........72
1.24. contribution to gdp growth in cambodia, 2017-19 .....................................................................................73
1.25. contribution to growth in tourist arrivals in cambodia, January-October 2020 .....................74
1.26. contribution to gdp growth in lao pdr, 2017-19..........................................................................................75
8 ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2021: REALLOCATING RESOURCES FOR DIGITALISATION © OECD 2021