In time of great competition, complacency is not an option

  • Opinion

We live in the most competitive region in the world. This offers us enormous opportunity – and big exposures if we fail to seize it.

Australian business knows the risk of having too many eggs in one market.

And Australia's security demands economic strength as well as diplomatic reassurance and military deterrence.

These are the reasons why increasing two-way trade and investment with Southeast Asia is a priority for the Australian Government, and we know the potential is vast.

In 2022, Southeast Asia's combined nominal GDP was around A$5.2 trillion—larger than the economies of the United Kingdom, France or Canada.

And by 2040, Southeast Asia is predicted to be the fourth-largest market after the United States, China and India. Indonesia alone is projected to be the world's fifth-largest economy by 2040.

We know that Southeast Asia needs more investment, goods and services to boost its economic development, support the transition to clean energy, and for the people of the region to reach their full potential.

But the stark reality is that our trade and investment with the region has not kept pace with the growth of Southeast Asian economies.

While Southeast Asia has grown rapidly, the share of Australia's overall trade in the region has flatlined over the past 15 years.

And Australian direct investment in the region is now lower than it was in 2014.

We need to turn this around. That's why we appointed Nicholas Moore AO as Australia's Special Envoy to Southeast Asia, and charged him with developing a Southeast Asia Economic Strategy to 2040.

The strategy, released by the Prime Minister yesterday, maps out trade and investment opportunities in the region, and recommends ways we can boost our economic engagement by raising awareness, removing blockages, building capacity and deepening investment.

Specialist deal teams will be established in Jakarta, Singapore and Ho Chi Minh City to work with investors – identifying opportunities and commercial partners, providing market intelligence, and proving guidance on risk, regulation and government liaison.

The teams will combine public and private sector expertise, and will be supported by a network of new investment staff in our missions in Bangkok, Kuala Lumpur, Manila, Hanoi, Bandar Seri Begawan and Phnom Penh.

We will set up a new Southeast Asia Business Exchange to coordinate business missions to the region targeting priority sectors, and step up coordination with local Southeast Asian diaspora.

And to encourage long-term capacity building and develop keener insights we will place young professionals from Australia in Southeast Asia, and vice versa, in a new placements and internship pilot program – prioritising companies involved in investment, energy transition and the digital economy.

These are some of the recommendations in the strategy, based on consultations with over 750 stakeholders and more than 200 submissions. The strategy defines opportunities across 10 priority sectors, including green energy, infrastructure, education and the digital economy.

The smart businesses know Australia needs to reduce reliance on any single trading partner, but it's not easy to get a foothold in new markets.

But it does come down to a simple and compelling fact: trading and investing more in our region means more opportunities for Australian businesses to grow, creating more Australian jobs and boosting our economic prosperity.

Moreover, growing our economic security in this way is a key element of our statecraft and central to our national interest.

As well as shoring up our own prosperity, it means we are working with regional partners to create opportunity together, and to demonstrate to the region that there are interests we are nurturing beyond strategic interests.

It builds the assurance that comes with knowing that our success is their success; to create the shared value that is a critical incentive for peace and stability in a time of heightened geostrategic contest.

So by boosting Australia's economic ties with Southeast Asia, we are advancing our shared interests in a secure and prosperous region.

Because in a time of great competition, complacency is not an option.

This article was first published in The Australian Financial Review on 7 September 2023

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