The Prime Minister of New Zealand has announced that his country will invest millions of dollars into the economies of the 10-member Association of Southeast Asian Nations (ASEAN). Htet Tayza discusses what this funding could mean for the region going forward.
Emerging economic powerhouse
ASEAN is an organisation which is designed to accelerate economic growth, social progress, and sociocultural evolution among its members. It currently includes Indonesia, Malaysia, Thailand, and Myanmar. Earlier this year Malaysia’s international trade and industry minister, Mustapa Mohamed, commented at the World Economic Forum that once its economies have been integrated, the ASEAN block would become the world’s seventh largest economy.
The ASEAN countries have benefitted significantly from trade with New Zealand. The island nation’s Prime Minister, John Key, revealed at the recent ASEAN-New Zealand Commemorative Summit that his country will invest over NZ$200 million into ASEAN economies. This will form part of an agreement to upgrade the New Zealand’s formal relationship with ASEAN to a strategic partnership.
He explained that: “This year, we celebrate 40 years of diplomatic relations with ASEAN, a key regional partner. The region – home to 625 million people and with GDP expected to grow to US$5.2 trillion by 2030 – presents significant opportunities for New Zealand and in recent years we have seen strong growth in trade. We are also working closely on shared political and security challenges. Our new agreement means we will work more closely together on these issues.”
Development assistance programme
New Zealand’s Prime Minister went on to reveal the details of the investment. He said that his nation would invest money to assist ASEAN development over a period of three years. This will make New Zealand’s development assistance programme in ASEAN the second-largest, after the Pacific.
Key went on to explain how the funds would aid development in the ASEAN territories. He said: “The funding will focus on building the capability of the region’s people and creating links between our young leaders and entrepreneurs – the people who will build on the ties we have forged for 40 years.”
Htet Tayza comments
Mustapa Mohamed’s comments at the World Economic Forum indicated that the ASEAN nations are set to record impressive economic growth. This growth will largely be based, as it is across the world, on the hard work and success of entrepreneurs and small businesses. For example figures from the Federation of Small Businesses showed that they made up for 99.3% of all private sector businesses in the UK at the start of this year.
Small businesses need secure stable cash flows to support their operations. This is why I believe New Zealand’s investment will lift the economies of the ASEAN members to new heights. It will provide their entrepreneurs with the financial assistance they need to develop successful ventures, which in turn will facilitate economic activity throughout Southeast Asian countries such as Myanmar.