When it comes to economic development, China’s amazing success soaks up much of the attention. But another huge region has quietly begun what looks like a new phase of exponential growth: Southeast Asia. The sustained enrichment of this region will transform the world, and carry important lessons for struggling countries like those in Africa.
Southeast Asia was once almost completely colonized by European powers, and much of it was devastated by a series of wars and internal strife in the mid-20th century. It remains largely poor, with notable exceptions including the wealthy city-state of Singapore, middle-income Thailand and Malaysia, an electronics manufacturing powerhouse that is approaching developed-country status.
The 1970s and 1980s saw very uneven growth throughout the region, and the 1997 Asian Financial Crisis was a brutal, long-lasting setback. In the 2000s, China surged ahead while Southeast Asia seemed like an also-ran.
But in the 2010s, growth accelerated all across the region. The standout is Vietnam, whose living standards have now almost quintupled since 1990. It barely stumbled at all after 1997, and has accelerated again in recent years:
Vietnam has gained notoriety for following much of the same playbook as China — liberalizing its economy, privatizing state-owned enterprises, promoting manufacturing and exports, holding down the value of its currency, and so on. It has benefitted from companies looking to diversify operations out of China, especially during the recent trade war.
But Vietnam is only the best of a very solid bunch. Indonesia and the Philippines, two archipelagic nations with large populations, now also appear to be entering a phase of explosive growth, with incomes that have doubled since the turn of the century.
Laos, Cambodia, and Myanmar are growing strongly as well. And another success story is nearby Bangladesh; though typically counted as part of South Asia, it’s enjoying a growth spurt that looks very similar to that of its neighbors to the southeast.
By some measures, Bangladesh is now richer than its giant neighbor India, whose economy has stumbled in the last few years.
It’s important to remember that all of these are still poor countries. Even after adjusting for local prices, they’re nowhere near as rich as a developed country like South Korea.