Asean, South Asia on path to connected growth by 2037

TWO decades ago, Asia was in the grip of a broad economic crisis. Through the 1997-98 Asian financial crisis, regional stock markets lost more than 60 per cent of their value. Already fragile government reserves ran dry. By May 1998, Indonesia's sovereign rating had fallen to CCC+.

This now seems a very long time ago. As 2017 draws to a close, let us reflect on the last two decades and envision what the next 20 years could be like. The recovery that followed the Asian financial crisis had been driven largely by domestic policy reforms, demographics in Asean and South Asia, and infrastructure investment in China. Corrective measures and market-friendly policies by governments strengthened economic foundations.

From 1997 to 2016, GDP (gross domestic product) per capita across Asean-6 countries had grown by 155 per cent. Indonesia's sovereign rating is now investment grade. To sustain growth, economies need to be more connected than they are now. Not just within the national confines, but across borders too. For a region as diverse as Asean and South Asia, integration is hardly an easy process though. Within Asean alone, the difference between GDP per capita in Singapore and Cambodia is as big as 55 times.