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ASEAN ranked the 5th largest economy, valued at $3.2 trillion

ASEAN is currently the 5th largest economy, valued at $3.2 trillion, after the United States, China, Japan, and Germany.



Viewed from a political standpoint, the region is center stage, hosting major global events such as the upcoming G20 summit in Indonesia, and visits from government delegates from around the world.

On the innovation front, we are seeing more and more unicorn start-ups being born in the region, especially in the areas of FoodTech and FinTech.  

The message to the world is clear – the spotlight is on ASEAN.

Over the past decade, ASEAN’s economy has developed rapidly, largely due to its unique geographical location and favorable business environment. In fact, ASEAN is currently home to four of the world’s fastest-growing economies – Cambodia, Indonesia, Singapore, and Vietnam.

As a single market, ASEAN is currently the 5th largest economy, valued at USD 3.2 Trillion, after the United States, China, Japan, and Germany. Furthermore, the region is on track to becoming the 4th largest economy by 2030, eclipsing Japan.

While ASEAN took a hit during the COVID-19 pandemic, it appears that the blow was not as bruising compared to other regions in the world.

Vietnam, for example, is one of the very few countries worldwide to have recorded positive economic results in 2020. As a whole, ASEAN countries managed to navigate the challenges with resilience and are bouncing back in steady recovery.

The outlook moving forward shows great promise for ASEAN; the region is expected to keep up its high GDP growth momentum and should be on course to overtake the bigger economies of China and the United States in terms of the rate of growth.

It has been projected that ASEAN’s growth will continue into 2030 averaging 5.3%, which is above the global norm.

ASEAN is fertile ground for trade and investments

Economic cooperation and integration are perhaps the most crucial pillars underpinning the region’s success and cohesion. ASEAN’s economic prospects rely on a set of significant and well-curated free trade agreements, and it appears that every economy wants a partnership.

The recent Regional Comprehensive Partnership (RCEP) agreement was signed in Hanoi, Vietnam in November 2020. This is the world’s largest free trade agreement that links ASEAN with China, South Korea, Japan, Australia, and New Zealand – countries with a combined population of 2.3 billion – covering 30% of global GDP and 28% of the world’s trade.

The RCEP is expected to greatly benefit ASEAN countries, potentially by up to $19 billion per year by 2030.

Where investments are concerned, due in part to its strategic geographical location, ease of doing business, tax incentives, and FTAs, ASEAN is currently one of the most attractive investment destinations for investors who are seeking to expand their global footprint.

The region’s FDI growth has been driven by strong investment mainly in Singapore, Indonesia, and Vietnam; these three countries received more than 80% of the inflows in 2019. That same year, ASEAN recorded the largest FSI inflow of any emerging market.

Although affected by COVID-19, by 2021, FDI into ASEAN had returned to pre-pandemic levels of $175 billion. Looking ahead, Vietnam plans to attract 50% of Fortune 500 companies into investment by 2030.

This trajectory is set to continue throughout the region, with the main goal of the ASEAN Community Vision 2025 being to further strengthen the capacity of member states to attract FDI in strategic industries.

Four megatrends driving growth and investment

Apart from the open financial landscape, what else is driving growth and investment in ASEAN?

Firstly, geopolitical shifts. The combination of rising labor costs, supply chain concerns, and geopolitical tensions are driving multinational companies to relocate a growing proportion of their manufacturing from China to ASEAN countries, in order to assert supply chain resilience.

Vietnam is the top choice in this exercise, contributing to Vietnam’s annual 6-7% economic growth over the past decade as companies consider factors such as overall labor cost, political stability, and social and cultural conditions.

A significant example is Apple relocating some of its AirPods production line from China to Vietnam in 2020, making the country one of the biggest beneficiaries of the “China+1” strategy of diversifying supply chains.

The second megatrend relates to digital advances. The extraordinary rates of digital expansion and digital ubiquity in ASEAN are helping to propel investment into the region.

Fun fact – ASEAN is the world’s fastest growing online market with online transactions expected to double to USD 73 billion by 2023 and the overall digital economy projected to hit USD 1 trillion by 2030.

Third is ASEAN’s changing demographics. Going hand-in-hand with digital advances is the merging middle class that embraces the online world and takes advantage of the greater opportunities that comes with it.

ASEAN’s middle class is projected to grow to 67% of the region’s total population by 2030 and the implications are significant – consumption is set to double by 2030, with high growth in sectors such as F&B, electronics, education, and transport. ASEAN is also home to a growing educated and young workforce; currently, 60% of its population is under 35 years old.

The last megatrend is ASEAN’s ESG (Environment, Social, and Governance) commitment and capabilities.

Emerging priorities to guide sustainable investment

Traditional investments used to be siloed into sectors, such as energy, manufacturing, and healthcare, each having its own strategic path, yet lacking a cohesive and unified long-term strategy.

Today, in the post-COVID-19 pandemic world, emerging priorities have been brought to the forefront, with the most significant being the Green Agenda, declaring that environmentally sustainable development is no longer on the fringe. It is the core.

Examples of market forces driving sustainable investments include:

Government regulations. Over the past three decades, there has been a 10-fold rise in the number of climate change laws and policies passed globally. There is a rush to comply and adapt, and there are expectations that more regulations will be designed to accelerate the transition to a low-carbon economy.

Investor expectations. Over 500 investors globally, who collectively manage more than USD 47 trillion in assets have signed the Climate Action 100+ initiative that aims to ensure that large corporate greenhouse gas emitters take action.

Consumer demands. Research has shown that more than 80% of consumers expect CEOs of consumer brands to be making more progress in reducing carbon emissions and single-use plastics.

Employee expectations. 78% of executives in a 2020 Deloitte survey indicated that their employees were very concerned about climate change. In another Deloitte survey, 45% of millennial employees said they would look to change jobs if their company did not implement sustainable business measures.

The reality is, if “business as usual” is continued as it is now, it will not lead to business as usual in the future. At Deloitte, we have posited that in Southeast Asia, and the larger Asia Pacific, there is a clear opportunity for the countries to lead the way and show how acting on climate change is not a narrative of cost but one of extraordinary opportunity and economic growth.

Southeast Asia, as a region, is sitting on $12.5 trillion opportunities that could materialize if action is taken now to invest in sustainable development.

Unlocking value with sustainable investments

There are already demonstrations of the value of ESG investment. Globally, assets under management in ESG-geared funds crossed the USD 1 trillion threshold in 2020, and over the past five years, ESG stocks outperformed the market by 88%. Big names are changing their entire business models to adapt.

Moving forward, given that market forces are prompting investors to reassign billions of dollars using an ESG lens, it can be expected that every deal will be scrutinized on ESG parameters. Private equity investors and businesses will need to embed ESG not only those geared to that end but across all transactions, if they are to curtail risks and deliver more value.

Within the M&A space for example, this means to base strategy, target identification, due diligence, valuation, integration, and value capture on material ESG components. For the foreseeable future, ESG-assessed M&A will be an important means to create growth, a competitive edge, and access to affordable capital.

ESG should now be regarded as a key lever of value – including establishing stakeholder trust, which is a determining factor in a companies’ feasibility to survive and thrive.

Where is ASEAN in this narrative? One can say that ASEAN is posed for success, given that its top sectors are receiving ESG investments. Increased levels of ESG investment are expected across the region, for example, energy in Vietnam, manufacturing in Indonesia, Thailand, and Vietnam, and mobility in Malaysia, Singapore, and Thailand.

All in all, ASEAN, acting now, can generate a cycle of positive outcomes. Sustainable financing will support improvements to existing infrastructure; which in turn unlocks new sustainable assets, which in turn furthers transition into a low carbon economy; which in turn increases investor trust in sustainable investments; which in turn enhances attractiveness to investors; which in turn allows sustainable infrastructure to gain access to more funding; and the cycle goes round.

How can leaders drive change?

First, the not-so-good news. Leaders struggle with short-term obstacles that impede future impact. The top five of these obstacles are difficulty measuring environmental impact, (2) insufficient supply of sustainable or low-emissions input, (3) too costly, (4) focus on near-term business issues/demands from investors/shareholders, and (5) magnitude of change needed is too large.  

The real question here is: are these real obstacles or just low priorities?

There are disconnects between ambition and the actions companies are taking to help the planet, and at present, the top actions taken by companies are very low-hanging operational ones, such as using sustainable materials, increasing efficiency of energy use, using energy-efficient equipment, training employees on climate change actions, and reducing air travel.

This goes to show that companies are still less likely to implement actions that demonstrate that they have truly embedded climate considerations into their culture to effect meaningful transformation.

The harder-to-implement, needle-moving actions include developing sustainable products, requiring suppliers and partners to adhere to sustainability criteria, updating facilities, and tying senior leaders’ compensation to ESG performance.

While each organization, industry, and region need to customize its own sustainability strategy, these actions are important markets of leadership as they require a mindset that sees both risks of inaction and the opportunity of sustainability.

Connecting for sustainability

ASEAN is poised for sustainable success; the investment and economic outlooks for the region are strong. But for this success to happen, priorities need to be aligned with sustainable development.

Now, businesses in the region need to go full throttle and invest in needle-moving actions to create climate-leading societies that are resilient and ready to outperform and thrive.

For investors, the advice is to come in early, with now being the best time to seize opportunities before it gets more competitive; and stay for the long run, as sustainability is not going anywhere – it is our present and our future.

* NG Jiak See is Deloitte Asia Pacific Financial Advisory Leader



Shell to deliver first LNG shipment for PV Gas



Petrovietnam Gas JSC (PV GAS) has confirmed a purchase with Shell PLC, facilitating the world’s leading LNG supplier to transport its first LNG shipment to Vietnam.

Shell to deliver first LNG shipment for PV Gas hinh anh 1The logo of Shell at the Contech Vietnam Fair in 2023. (Photo: VNA)

Hanoi Petrovietnam Gas JSC (PV GAS) has confirmed
a purchase with Shell PLC, facilitating the world’s leading LNG supplier
to transport its first LNG shipment to Vietnam.

PV GAS issued a tender on April 27 to import LNG for the trial run
and commercial operation of Thi Vai LNG warehouse.

And Shell was selected as the supplier for the first imported LNG
shipment to the warehouse.

The signing confirmation is a milestone for developing PV GAS and Vietnam’s
gas industry. The Thi Vai LNG Warehouse is the largest scale in Vietnam
with a capacity of phase 1 of 1 million tonnes per year, then expanding to
3-6 million tonnes. 

It can receive LNG vessels of up to 100,000 tonnes of LNG ships,
with the main phase 1 facility including LNG storage tanks with a capacity
of 180,000 m3 and technological equipment designed according to Vietnamese and
international standards and regulations.

The system will supply about 1.4 billion m3 of gas to Nhon Trach 3
and 4 power plants, industrial customers, and a part of Vietnam’s gas shortage
after 2023./.


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Vietnam sees steep decline in hiring of foreigners, overseas Vietnamese



The Vietnamese job market saw a plunge in recruitment demand in January-April, with hiring of foreigners and overseas Vietnamese tumbling 39 percent compared to the pre-pandemic level due to the global economic downturn, according to a report recently issued by Navigos Group, one of the leading recruitment companies in Vietnam.

In addition, there was a significant drop of 63 percent in demand for hiring seasonal workers and individuals on short-term contracts. 

Similarly, the demand for recruiting new graduates also experienced a substantial decrease of 49 percent.

Following the prevailing market fluctuations and economic downturn, there was a noticeable decline in labor recruitment demand for various positions including foreigners, overseas Vietnamese, seasonal workers, short-term contracts, new graduates, and mid-level and senior professionals, according to the Navigos Group report.

Overall downtrend

Navigos Group conducted the analysis using job posting data from its platforms, VietnamWorks and Navigos Search, comparing the first four months of 2019, or the pre-COVID period, with the first four months of 2022, or post-pandemic, and January-April this year.

The findings showed that on average, the recruitment demand for various industries during the first four months of 2023 shrank 18 percent compared to the pre-pandemic period and reduced 16 percent compared to the post-pandemic recovery phase in 2022.

Notably, the textile, garment, and footwear industries experienced a persistent 39-percent fall in labor demand, primarily influenced by the global economic recession, inflation impacting purchasing power, and reduced orders.

The recruitment demand in the construction and real estate industry contracted by up to 34 percent in January-April and the procurement, materials, and logistics sectors faced a 25-percent decrease compared to 2019.

The import-export sector dwindled by 18 percent, while the transportation and logistics sector recorded a decline of 22 percent.

The tourism, restaurant, and hotel sectors, which were significantly impacted by the COVID-19 pandemic, saw the recruitment demand dive by 55 percent in the first four months of 2022 compared to the pre-pandemic level.

However, there was a slight increase in staffing requests within these sectors in January-April, with the decline reducing from 55 percent in 2022 to 43 percent when compared to the pre-pandemic level.

The legal and administrative fields also encountered a substantial decline of 31 percent in the demand for recruitment.

The recruitment demand for marketing professionals dropped by 28 percent compared to the pre-pandemic period.


Bucking the downtrend, the banking and financial services sector, along with the consumer goods industry, experienced a growth rate of 10 percent in the first four months of 2023 compared to the equivalent period prior to the pandemic.

The recruitment demand in the healthcare, retail, and wholesale sectors remains stable, with little to no significant changes.

Navigos Group forecasts that businesses will continue to adopt cost-cutting measures to retain their workforce or may even tighten their belts further until the global economy hits its lowest point and begins to recover.

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Hanoi urged to bolster economic growth drivers



Permanent Government members have asked Hanoi to bolster its economic growth drivers, namely investment, export, and consumption, during a recent meeting with the Standing Board of the municipal Party Committee.

Hanoi urged to bolster economic growth drivers hinh anh 1Part of Hanoi capital city (Photo: VNA)

Hanoi – Permanent Government members have asked Hanoi to bolster its economic growth drivers, namely investment, export, and consumption, during a recent meeting with the Standing Board of the municipal Party Committee.

They highly valued efforts and achievements by the Hanoi Party organisation, administration, and people which have joined the entire country in stablising the macro-economy, controlling inflation, boosting growth, guaranteeing major balances, developing culture, maintaining political stability and social order and safety, consolidating defence – security, and promoting external relations and integration into the world, according to the Government Office’s announcement of the permanent Government members’ conclusions made at the meeting.

However, there remains certain shortcomings, difficulties, and challenges to be addressed, they pointed out, elaborating that Hanoi hasn’t made any considerable breakthroughs in economic development, especially sustainable and substantive development; the growth pace is slower than expected; while environmental pollution, traffic congestion, and infrastructure overload have yet to be improved remarkably.

They requested that the city should be further aware of its role, position, potential, and importance to national development; identify difficulties, challenges, and weaknesses; strongly bring into play self-reliance, solidarity, and the spirit of thinking big and acting bold so that it can develop comprehensively, fast, and sustainably and deserve its status as the national political – administrative headquarters and a big centre in terms of economy, culture, education – training, science – technology, and international integration of the whole country.

Hanoi should actively grasp the situation; stay ready to respond to any circumstances; improve the capacity of forecasting possible impacts on local economic development; make flexible, timely, and effective policy response; and bolster economic growth drivers (investment, export, consumption). Besides, it needs to seriously implement the Government and the Prime Minister’s resolutions and directions on dealing with problems in the monetary, credit, real estate, stock, and corporate bond markets.

The capital needs to improve the management, use, and disbursement of public investment, along with funding for the socio-economic recovery and development programme and the three national target programmes. It should strive to complete the tasks and overfulfill the targets for 2023 so as to create a solid stepping stone for the following years. It is also necessary to mobilise every resource for development, promote public – private partnership, and apply new governance, investment, and management models.

Permanent Government members demanded Hanoi push ahead with administrative reforms; build a system of administrative agencies with strong solidarity, high unanimity, integrity, and democracy that work efficiently and centre on people and enterprises; and develop a contingent of professional, civilised, modern, incorruptible, and devoted cadres and civil servants who work for the sake of the people.

They underlined the importance of quickly devising the Hanoi Capital Planning for 2021 – 2030, with a vision to 2050; and adjusting the general planning for building the city by 2045, with a vision to 2065 that features a reformed mindset and a breakthrough, strategic and long-term vision, capitalises on every distinctive potential, outstanding opportunities and competitive edges, and addresses outstanding problems and weaknesses.

The city was also told to step up the implementation of national digital transformation measures and increase the provision of online public services on the National Public Service Portal.

In addition, Hanoi needs to boost socio-economic development in tandem with preserving and bringing into play traditional cultural values and protecting the environment. Social issues, social welfare policies, job creation, and educational and manpower quality should also be given due attention.

The officials required Hanoi further to guarantee political security as well as social order and safety, step up substantive diplomacy and international integration, enhance disease prevention and public health care, and augment the fight against corruption and other negative phenomena.

Local authorities were also asked to boost the Party and political system building; create a lean, efficient, and effective apparatus; and develop a contingent of moral and capable personnel, especially leaders of agencies, according to the announcement./.


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