‘Fabulous 5’: Why Malaysia, Indonesia, Thailand, the Philippines, and Vietnam are set to power Southeast Asia's next decade

In an interview with Bernama, Chief Economist at Juwai-IQI Holdings Shan Saeed said that in the coming decade,  Southeast Asia’s economy will not be driven by a single country but by the “fabulous five”: Malaysia, Indonesia, Thailand, the Philippines, and Vietnam.

This concept of identifying these economies is not for the purpose of ranking them within the ASEAN, but for determining the countries that are believed to drive investable growth in the region over the next decade.

Mr Shan pointed out that taken together, these five countries make up almost 90% of ASEAN’s population, or around 610 million people.

Each country has its strengths. Malaysia has one of the most sophisticated capital-market and institutional-finance ecosystems and is becoming a regional AI and data-centre hub, while Indonesia has one of the most important domestic-demand markets not just in Asia but across the globe. Vietnam, meanwhile, shines in terms of export-manufacturing capability.

Thailand’s contribution is in the industrial, automotive and tourism sectors, and the Philippines’ strength is in services and remittances, plus a youthful workforce.

Vietnam has been the region’s fastest-growing economy (7.83% year-on-year). Indonesia is in second place (5.61%), closely followed by Malaysia (5.4%). The economies of the Philippines and Thailand, meanwhile, both grew by 2.8%. 

"This dispersion does not weaken the ASEAN story. It sharpens it. Capital is increasingly rewarding economies that combine growth with institutional credibility, external stability and policy execution," he told Bernama.

Mr Shan believes that the next wave of investment will be all about tech, driven by digital infrastructure, including artificial intelligence, cloud computing, semiconductors, data centres, fintech and cybersecurity.

Should the ASEAN Digital Economy Framework Agreement be implemented successfully, he added, by 2030, the region’s digital economy could double to US$2 trillion (around S$2.56 trillion).

He also underlined the need for the five countries to have strong foreign exchange reserves as protection from global economic shocks. Thailand has the highest foreign reserves (US$280.5 billion) among the five economies. 

Others have held opinions similar to Mr Shan’s. Economist Kristalina Georgieva, the director of the International Monetary Fund and former Vice-President of the European Commission, has argued that ASEAN is one of the fastest-growing regions in the world, thanks to stronger policy fundamentals. She has also said that future growth depends on digitalisation, regional integration and continued reforms.

An article last March from the Phnom Penh Post quotes analysts as saying that Malaysia, Indonesia, the Philippines and Vietnam will also lead ASEAN’s economic growth this year, securing economic expansion they believe to be long-term. /TISG

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