The Way Ahead
ASEAN countries are experiencing great economic and social transformations. While economic and productivity growth and structural change are making these countries richer, not all parts of society are benefitting from increased prosperity.
There are several win-win areas where ASEAN can improve competitiveness and inclusive growth at the same time:
Investing in equitable educational systems will equip large parts of the population with the skills required by modern economic production and therefore will create better job opportunities for all.
Bridging gaps in infrastructure capacity in the region, especially in ICT and transport will reduce logistics cost, boost efficiency and connect people to markets.
At the same time, improving social protection, financial inclusion and broad based asset building will be important to turn efficiency gains into shared prosperity.
Social policies and sound institutions will be critical to achieving inclusive growth in ASEAN. Historically, countries have experienced a phase of increasing inequality in their initial phase of development before rebalancing their economies; whether or not ASEAN countries follow the same path will depend on the policies they adopt now to address capital, skill, and spatial biases.
Priority Areas for Growth with Inclusion in ASEAN:
| Country | Priority 1 | Priority 2 | Priority 3 |
|---|---|---|---|
| Singapore | Social Protection | Wage and non-wage compensation | Institutions, corruption and rents |
| Malaysia | Education quality and equity | Technological readiness | Social Protection |
| Indonesia | Technological readiness | Infrastructure | Wage and non-wage compensation |
| Lao PDR | Education quality and equity | Infrastructure | Social Protection |
| Philippines | Infrastructure | Institutions, corruption and rents | Financial System Inclusion |
| Thailand | Institutions, corruption and rents | Technological readiness | Infrastructure |
| Vietnam | Technological readiness | Financial System Inclusion | Technological readiness |
| Cambodia | Education quality and equity | Technological readiness | Social Protection |
Note: Color coding corresponds to recurring issue areas by thematic focus. Priorities are based on ASEAN’s performance gap vis-à-vis the global best combining results from the Global Competitiveness Report 2015-16 and Inclusive Growth Report 2015.