A former Cabinet official sees the Southeast Asian economy to rebound from the coronavirus crisis and rise by 6 percent this year, saying growing urbanization and infrastructure development are boosting the region’s growth prospects.
During The Manila Times Economic Forum 2021: Rising from the ashes: From pan-Asian to pan-Global on Friday, Jose Isidro “Lito” Camacho, managing director and vice chairman of Asia Pacific Credit Suisse, said that although he was “looking at a recovery across the region,” this came “with a wide range of expected performances.”
It is important to take the region in parts, instead as a whole, since this would tell more of the nature of the economy of each Association of Southeast Asian Nations (Asean) member, he added.
According to him, Indonesia is forecast to grow this year by 4.4 to 6.1 percent; Thailand, 2.3 to 3.3 percent; Singapore, 4 to 6 percent; Vietnam, 6.5 to 8 percent; and the Philippines, 6.5 to 7.5 percent.
The Covid-19 pandemic is the most important of the factors expected to influence recovery, said Camacho, an Energy and Finance secretary during the administration of Gloria Macapagal-Arroyo.
The nature, as well as the pace of the reopening of each Southeast Asian economy; lifting of mobility restrictions, and rate of the rollout of coronavirus vaccines in each country all play a role in the region’s improvement, he added.
But he noted a wide disparity in economic performance among the Asean members during the pandemic and their response to it. This, he said, was dependent on the nature of each economy and the economic measures implemented by its leaders that rely on fiscal resources.
Despite this, Camacho is bullish about Southeast Asia’s growth prospects in the longer term and sees it becoming one of the fastest-growing regional economies in the world.
He cited the expected growing urbanization, infrastructure development, its richness in natural and manpower resources, and emergence of so-called Asean multinationals for the upbeat projection.
Camacho also touched on the Regional Comprehensive Economic Partnership (RCEP) free trade agreement (FTA), which aims to deepen Southeast Asia’s engagement with Australia, China, Japan, South Korea and New Zealand.
Signed on November 15, the RCEP was built upon the existing Asean+1 FTAs with the goal to strengthen economic linkages and to enhance trade and investment-related activities, and to contribute to minimizing development gaps.
Although Camacho considers the RCEP’s signing to be “a good thing,” he said its actual implementation would take years.
“It’s a good thing that it happened, but let’s not get carried away. It will take time to take effect. RCEP is also, at this point, merely a consolidation or harmonization of existing bilateral and subregional agreements,” he said.
The partnerships’ “economic, investments and trade impact may be very, very minimal,” he added.