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Despite the muted prospects for China and India in 2022, we have reason to believe there will be no comparable doom and gloom in Southeast Asia – in fact, there should be growth throughout 2021.
Of course, that sounds like something I would say as an ardent believer in Southeast Asia’s overwhelming potential. But I’m just asking you to look at the evidence. I’m not saying Southeast Asia will bask in sunny optimism in 2022. What I am saying is that there are a number of domestic and international factors supporting growth in the region over the course of this year.
Let’s look at these reasons and see why I believe this year will be better for Southeast Asia than last.
Tourism is finally recovering
Tourism is one of the most important industries in Southeast Asia and is finally recovering. The problem is that this recovery is slow – as immunization numbers are slowly increasing across the region. However, slow is stable and I don’t think many people expected any improvement at all after such a terrible run through 2020 and 2021.
As we slowly emerge from the shadows of this difficult time, we can see that efforts to improve tourist safety and confidence are working. We see more visitors every day – and it’s not just backpackers and budget travelers. We are seeing a trend towards a more upscale demographic, particularly in the area of medical tourism in Thailand and Bali.
Regardless of demographics, countries like Thailand have seen an increase from around 20,000 tourists in October 2021 to around 91,000 in November 2021. Of course, before Covid, Thailand is used to three million tourists a month. But it’s still encouraging to see the numbers slowly coming out of the doldrums.
Tourism has always been the ace up Southeast Asia’s sleeve. Its slow but steady march on its earlier ones 400 billion dollars The glory should start trickling into other sectors, boosting consumer confidence and generally just helping the region’s economic health.
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Rising immunization numbers are helping the private sector gain momentum
Governments in the region are relying less on lockdowns to stop infections as vaccination numbers continue to rise. As a result, the private sector can once again achieve its full potential, since it is no longer hampered by restrictions on movement and trade.
This is good news for the private sector. They can now resume operations and help fuel growth in the region. It’s also good news for consumers. You will now have access to more goods and services. Finally, there is good news for workers. You can now find employment in the private sector.
A revitalized private sector means improved supply chains
The private sector has a lot to do. Improving supply chains and production lines to handle the pent-up demand of a year or two will take time. However, I cautiously believe that a high-demand market will soon impact the region. Its GDP is being bolstered by rising exports from Southeast Asia to a world economy starved of goods and services.
Countries in Southeast Asia will finally see an increase in exports. You are no longer hampered by roadblocks and supply chain issues. The pace of this export growth may be slower than in other regions. But it’s still a positive indicator of the future health of Southeast Asia’s economies.
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Increasing energy demand means innovation and jobs
As the economies of Southeast Asia continue to grow, so does the need for energy. This increased demand is good news for energy producers. It will create a seller’s market and drive innovation in the aging, fossil fuel-dominated energy sector.
Southeast Asia’s energy requirements will continue to grow 60 percent by 2040, and that pragmatically cannot come from fossil fuels. It must come from a regional power grid that uses more efficient and even renewable energy sources. That ASEAN Action Plan for Energy Cooperation (APAEC) already made plans for it.
This is also good news for workers. Jobs will be created in the energy sector. Many of these jobs will be in sustainable energy sources such as solar and wind power. These resources are becoming increasingly important as the world moves away from traditional, polluting energy sources.
The increasing energy demand in Southeast Asia is a sign of the region’s economic health and vitality. It is also a sign of the region’s commitment to sustainability, which is vital in the years to come and is underscored by our reputation for innovation on the world stage. It would also be a practical magnet for eco-friendly tourism.
Again, cautious optimism is warranted for Southeast Asia’s growth prospects in 2022. But still optimistic. Rising tourism numbers, a private sector recovery and an imminent surge in energy demand are likely. While there are still some challenges to be overcome, such as improving long-spread supply chains and exporting goods, the region is looking up. Let’s hope this growth can be sustained in the years to come as we emerge from this pandemic.
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