Building Up Growth

For economies in the Association of Southeast Asian Nations (ASEAN), infrastructure is the conduit that enables investments, organisational effort, and human capital to contribute to economic growth and social development. The worldwide crisis brought by the COVID-19 pandemic caused economic contraction for most members of the trade bloc. With advancements in treatment, public health policies, and fundamental changes in social interactions, the region now undergoes a period of transformation as it recovers from losses experienced in 2020.

Integral to growth in the economic bloc is the expansion and modernisation of infrastructure. As advanced as Singapore is in terms of infrastructure, new policies are being crafted and implemented to bring the country into an era of sustainable energy use. A more cautious Malaysian government, burdened by debt in the wake of the pandemic, seeks to roll back its ambitious infrastructure plans, yet continues to invest in several major powerplants. Private infrastructure investment in Indonesia bounced back in 2021 with USD 1,272mn for projects in the sector. Indonesia also increased its infrastructure budget for 2021 by 47%. In Thailand, an intent to increase integration within the country and with its neighbours has directed infrastructure investments toward the Eastern Economic Corridor. With the Build, Build, Build programme, use of the public-private partnership model resulted in the creation of 6.5mn jobs. The Vietnamese government recognises that it needs VND 900tn in infrastructure investment to expand and modernise its road and railway systems. Using funds from the Belt and Road Initiative, Vietnam constructed 11 powerplants.

The variations in infrastructure quality within ASEAN indicate areas for potential improvement. While Singapore maintains its position as a world leader in infrastructure, road infrastructure for many nations of the trade bloc was ranked far behind Singapore and Malaysia. Some of the issues plaguing those countries included low sector investment, rule of law perceptions, and lower investment recovery rates. More advanced countries in the trade bloc had more efficient seaport services than their less developed neighbours. Countries with higher electricity supply system losses are currently investing in infrastructure, as leading members ranked in the top 30% of all nations for their electricity supply. Electricity access in much of ASEAN still needs improvement, yet many of the members can provide upwards of 98.2% (Malaysia) of their populations with electricity.

In a region whose varied levels of infrastructure development serve as evidence of the consequences of past policies and involvements, the economic bloc continues to grow, while adapting to an ever-changing public health environment. Members of the trade bloc are aware of the positive correlation with social and economic development and infrastructure, as world rankings in the sector influence public and investor opinions. In this context, ASEAN members must find a way to function in a tumultuous geopolitical landscape in order to provide better futures for their citizens.

For more in-depth information and insights on ASEAN Infrastructure you can check EMIS Insights’ ASEAN Infrastructure Sector Report. Detailed data on various sectors of ASEAN economy can be found in the EMIS Insight annual and quarterly reports on the countries from the bloc.