Twenty-first-century challenges for Southeast Asian economics

Abstract

Southeast Asian economic development is a work in progress. Much has been achieved, and yet in this region only Singapore has managed to sustain a growth rate high enough to break out of middle-income, while some other economies (including Indonesia, the largest) seem destined to remain among the ranks of the lower middle-income countries for the foreseeable future. In most of the region�s economies, historical dependence on resource-based production and exports is increasingly being supplanted by activities more reliant on investment goods, technology, and human capital. But the transition remains incomplete and uneven. The continued momentum of structural change is threatened both by internal constraints (lack of infrastructure, urban congestion, and weak educational systems) and external challenges (low-cost competitors in global markets for manufactures, global market instability). In several countries, the political and administrative institutions needed to promote confidence among domestic and foreign investors, to reduce corruption and inefficiency, and to promote stable, fair and sustainable development policies are not convincingly keeping up with the pace of economic growth.