Southeast Asia - Economy

Economy

Even prior to the penetration of European interests, Southeast Asia was a critical part of the world trading system. The Ryukyu Kingdom often participated in maritime trade in Southeast Asia. A wide range of commodities originated in the region, but especially important were such spices as pepper, ginger, cloves, and nutmeg. The spice trade initially was developed by Indian and Arab merchants, but it also brought Europeans to the region. First Spaniards (Manila galleon) and Portuguese, then the Dutch, and finally the British and French became involved in this enterprise in various countries. The penetration of European commercial interests gradually evolved into annexation of territories, as traders lobbied for an extension of control to protect and expand their activities. As a result, the Dutch moved into Indonesia, the British into Malaya, the French into Indochina, and the Spanish and the U.S. into the Philippines.

While the region's economy greatly depends on agriculture, manufacturing and services are becoming more important. An emerging market, Indonesia is the largest economy in this region. Newly industrialized countries include Indonesia, Malaysia, Thailand, and the Philippines, while Singapore and Brunei are affluent developed economies. The rest of Southeast Asia is still heavily dependent on agriculture, but Vietnam is notably making steady progress in developing its industrial sectors. The region notably manufactures textiles, electronic high-tech goods such as microprocessors and heavy industrial products such as automobiles. Reserves of oil are also present in the region.

Seventeen telecommunications companies have contracted to build a new submarine cable to connect Southeast Asia to the U.S. This is to avoid disruption of the kind recently caused by the cutting of the undersea cable from Taiwan to the U.S. in a recent earthquake.

Tourism has been a key factor in economic development for many Southeast Asian countries, especially Cambodia. According to UNESCO, “tourism, if correctly conceived, can be a tremendous development tool and an effective means of preserving the cultural diversity of our planet.” Since the early 1990s, “even the non-ASEAN nations such as Cambodia, Laos, Vietnam and Burma, where the income derived from tourism is low, are attempting to expand their own tourism industries.” In 1995, Singapore was the regional leader in tourism receipts relative to GDP at over 8%. By 1998, those receipts had dropped to less than 6% of GDP while Thailand and Lao PDR increased receipts to over 7%. Since 2000, Cambodia has surpassed all other ASEAN countries and generated almost 15% of its GDP from tourism in 2006.

Indonesia is the only member of G-20 major economies and considered to be the largest economy in the region. Indonesia's estimated gross domestic product (nominal) for 2008 was US$511.7 billion with estimated nominal per capita GDP was US$2,246, and per capita GDP PPP was US$3,979 (international dollars).

Stock markets in Southeast Asia have performed better than other bourses in the Asia-Pacific region in 2010, with the Philippines' PSE leading the way with 22 percent growth, followed by Thailand's SET with 21 percent and Indonesia's JKSE with 19 percent.