The Future of ASEAN and the Role of the United States – The Asia Foundation

The Association of Southeast Asian Nations (ASEAN) is now America’s fourth-largest trading partner. Two-way trade in goods and services has tripled since the 1990s and the United States is the largest source of foreign direct investment in ASEAN. More than 560,000 U.S. jobs, accounting for 7 percent of the total U.S. jobs, are supported by goods and services exports to ASEAN. U.S. investment in ASEAN is almost $190 billion, exceeding all other destinations in Asia, while ASEAN investment in the United States exceeds $27 billion. With its future increasingly intertwined with ASEAN, the United States must maintain the momentum of its rebalance towards the Asia-Pacific, focusing on three pillars: comprehensive and inclusive security networks, economic integration and connectivity, and soft power and people-to-people ties. Economic Dynamics After 50 years of collective efforts promoting regional cooperation, ASEAN today is one of the most economically dynamic regions in the world, with tremendous potential for the future. ASEAN is now the seventh-largest world economy. By 2050, it is projected to become the fourth largest. Labor productivity, innovation, entrepreneurship, and the realization of a regional common market and production base are the key forces driving this growth. According to data from the United Nations Population Division, ASEAN’s population will increase from 633 million in 2015 to 717 million in 2030 and 741 million in 2035. ASEAN has the third-largest labor force in the world, after China and India, and its young population promises a demographic dividend that will allow ASEAN to maintain its economic competitiveness and high socioeconomic performance well into the future. A 2014 study by McKinsey & Company placed about 70 million ASEAN households in the “consuming class,” with incomes exceeding the threshold at which they can begin to make significant discretionary purchases. That class will double in size, to 125 million households, by 2025, making ASEAN a pivotal consumer market of the future. ASEAN consumers are increasingly moving online, with high penetration rates of mobile and Internet services. The main challenge for the emerging economies of ASEAN is the middle-income trap, but a study by the Asian Development Bank has projected… Read more

Source : The Future of ASEAN and the Role of the United States – The Asia Foundation

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