Forget BRICS — 2016 Is The Year Of The ASEAN Bloc

ASEAN member nations

2015, what a year that was for BRICS! It will be the year to remember Brazil’s economic slowdown and turbulent political scene, China’s botched response to a rout in its stocks that gripped financial markets in mid-2015, and geopolitical tensions and economic sanctions placed on Russia.

But what’s happening with other emerging markets outside the BRICS?

The Reuters Global Investment Outlook Summit pointed out the ASEAN trade bloc, which comprises of countries such as Indonesia, Malaysia, Thailand and the Philippines is what we ought to be looking at for next year. Here are the countries we are all definitely going to be hearing about in 2016:

1. Indonesia

In a previous post, I mentioned that Indonesia was the rising star in the Prosperity Index 2015 report. The country’s economic success is mainly due to the start-up boom and not surprisingly, the number of people satisfied with their living standards has increased from 63% to 71%, according to the Index. Also, a McKinsey report believes the Indonesian economy will become the 7th largest economy by 2030, overtaking Germany and the United Kingdom. Pretty optimistic in my opinion.

Some of the types of Start-ups you can find there are certainly diverse, varying from a male contraceptive pill, a parental control app to an electrical shoe for women to fend off potential attackers.

2. Vietnam

Transitioning from frontier to emerging market, Vietnam should be in any list of up-and-coming business prospects. While farms, household enterprises are still a big part of the country’s economy, the private sector jobs promise the potential for the rapid productivity gains needed to boost large numbers of Vietnamese workers into the ranks of the global middle class. In addition, a low inflation environment has enabled the State Bank of Vietnam to maintain an expansionary monetary policy stance.

3. Philippines

The Philippines has strategically positioned itself as an investment alternative to China. Foreign direct investment to this South-east Asian archipelago doubled in 2014, and its economy grew by 5.6 percent in the second quarter of this year. However, the Philippines has some similarities with the African countries – only 20 percent of Filipinos are banked and roughly 98 percent of all transactions are cash based. To exploit this, the government, USAid and mainstream banks have teamed up to create the E-Peso, an e-payment system that is not only B2C, B2B and C2C, but also in the public space.

ASEAN’s move towards a united market has long been seen as problematic process with lots of pros and cons, however analysts on the ground say the move is likely to bring sustained growth and communication to the region, and in my opinion, perhaps this will be something more profitable and useful for each country – something that has yet to happen to South America’s Mercosur.