AS BUSINESSES shift and diversify away from the People’s Republic of China and rely more and more on Southeast Asia (among other places), our part of the world becomes more complicated.
Southeast Asia will start to play a more prominent role in global trade because of our location, but with increasing prosperity comes new problems.
For example, I have no doubt that the diffusion of capital away from China will benefit other emerging countries, leading to higher gross domestic product (GDP) for Southeast Asia. However, higher GDP does not necessarily mean better standards of living.
It’s entirely possible that member-states of the Association of Southeast Asian Nations (ASEAN) will enjoy high growth but only in certain areas. It’s also possible that the influx of new capital may lead to subsidies, dumping practices or tariff wars in the region, as each country tries to capture capital and markets in an uncertain environment. Imagine the US-China trade war but with emerging countries competing for investors.
How well will the Philippines act in such an environment? I don’t know.
We’re one of the largest countries in the region, and we still have a young demographic dividend to look forward to, but those things are not enough to succeed.
All this is speculation for now (and it’s entirely possible that Southeast Asia’s economic boom will fizzle out), but assuming everything goes right for our region, the politics will not be too far behind the economics.
ASEAN may also need to coordinate how its member states construct their supply and capital chains, for example, and the competition may strain relations.
And that’s just the start. China, and the US may complicate things, and both will try to increase their respective influence. In a worst case, I can see China expanding its military control of the West Philippine Sea to further control the economic situation in our region and safeguard their interests (at the expense of ours), which will very likely trigger a similar response from ASEAN member states and the US./PN
