Association of Southeast Asian Nations (ASEAN)
General Overview
Alberta has a strong and growing trade relationship with the 10 countries that comprise the Association
of Southeast Asian Nations (ASEAN): Singapore; Indonesia; Malaysia; the Philippines; Thailand;
Brunei; Cambodia; Laos; Myanmar (Burma); and Vietnam. With a combined population of more than
620 million people, ASEAN already represents a significant trade destination for Alberta’s exports.
ASEAN currently ranks as the fourth largest trade destination for Alberta products (2014 figures) – after
the USA, China and Japan – with two regional markets (Indonesia, Singapore) ranking in top 25
countries for Alberta exports.
With a younger population, rapid urbanization and a growing middle class, Southeast Asia has an
immense growth potential for Alberta companies of all sizes. The rapidly growing domestic consumer
market has resulted in an increased demand for the products Alberta businesses offer – such as
agricultural and agri-food. As well, the increase in manufacturing and urbanization is leading to an
increase in energy needs and services.
Southeast Asia remains one of the most rapidly growing regions of the global economy supported by
strong domestic consumption and investment while also remaining a major global hub of manufacturing
and trade. Alberta’s exports to the Southeast Asian region have grown by 13.5 per cent since 2010,
totalling more than CAD $1 billion worth of goods and services.
Economic Overview
As of 2014, ASEAN’s gross domestic product (GDP) stands at USD $2.4 trillion while its per capita
GDP is USD $3,832. It is the second-fastest growing economy in Asia, after China, with the ASEAN
economy having expanded 300 per cent since 2001.
To further economic integration within the region, ASEAN created the ASEAN Economic Community
(AEC) with the goal of establishing a common market amongst member countries by the end of 2015.
In addition to the AEC, the ASEAN Free Trade Area (AFTA) was created in 1992 to promote the free
flow of goods between member states. The goals of AFTA are to create a single market and production
base that will allow the Southeast Asia region to fully integrate into the global economy. ASEAN
countries are lowering their import duties with member nations with a goal of having zero import duties
by 2015.
.
A major challenge within ASEAN is the significant economic variation amongst its members. As
noted by McKinsey & Company, GDP per capita in Singapore is more than 30 times higher
than in Laos and more than 50 times higher than in Cambodia and Myanmar. Indonesia
represents almost 40 per cent of the region’s economic output and is a member of the G20,
while Myanmar, emerging from decades of isolation, is still a frontier market working to build its
institutions. Export Development Canada regards Southeast Asia as a high priority strategic
region when economic growth and development will exceed the global average for the next
several years. It should be noted that while the Southeast Asia region macroeconomic
framework and regional/international economic policy engagement are stable, the day-to-day
business environment remains challenging for many firms.
Market Opportunities
There is an opportunity to grow Alberta trade across all sectors. The ASEAN region has a
growing demand for niche, value-added products and other agricultural inputs, which Alberta
has the capacity to supply. ASEAN countries are midsized economies and (in the case of
Singapore and Malaysia in particular) relatively easy to penetrate even for Alberta SMEs. They
can also provide a solid base from which Alberta companies can expand business into the
broader Asian market. Alberta exporters can execute a market entry strategy targeting one of
the Southeast Asian or Oceania economies followed by building a broader Asian footprint.
The region also represents a potentially significant source of capital and investment into
Alberta. This includes the potential for sizable investments by sovereign wealth funds (in
infrastructure, natural resources), state controlled energy companies (oil and gas and oil sands)
and family funds, as well as smaller private sector investments (in infrastructure, food
processing and distribution, tourism and technology for example).
Alberta - ASEAN Relations
ASEAN was Alberta’s fifth largest market for agri-food exports in 2014. Alberta’s agri-food
exports to ASEAN were valued at $289 million. Indonesia was the number one ASEAN market
for Alberta agri-food exports ($187.1 million), followed by Singapore ($36.9 million), the
Philippines ($25.6 million) and Thailand ($15.1 million).
Alberta and Singapore also enjoy strong links through research and education agreements, as
well as a strong level of trade and investment in the energy and agriculture sectors. These ties
are enhanced by the hundreds of Singaporeans who have chosen to study, work and reside in
Alberta and the many Albertans who reside in Singapore.
In order to strengthen Alberta's position in priority international markets and better support
Alberta companies, the Alberta Singapore Office was opened in January 2014 and serves as a
regional hub to access Singapore and other priority markets in Southeast Asia. The office was
established to promote Alberta’s business interests, attract investments to Alberta and educate
local stakeholders on Alberta’s key sectors and international priorities.
2
Demographics, Language and Culture Overview
Many ASEAN countries are experiencing rapidly growing populations of working-age adults,
which when combined with low mortality and fertility rates, means that there is the opportunity
for strong economic growth in the medium and long-term. At current growth rates, Southeast
Asia’s working-age population will account for 68 per cent of the region’s total population by
2025. Indonesia, Vietnam, Malaysia and the Philippines are expected to experience doubledigit labour force growth through 2020 and beyond.
The Southeast Asia region is a diverse mix of ethnicities, religions, languages and economies,
both in size and in maturity. Philippines is more than 80 per cent Roman Catholic, while
Indonesia is almost 90 per cent Muslim, and Thailand is more than 95 per cent Buddhist. While
English is to be the “working language of ASEAN”, the region currently has more than 1,000
languages and dialects.
This diversity means that neither the Alberta government nor Alberta companies can look at
this region as a monolithic block: a once-size-fits-all strategy will not work in this region. As
well, this diversity means that the barriers to enter the overall Southeast Asia market is higher
when compared to expanding into a single country and companies should be aware of local
preferences and cultural sensitivities.
Free Trade Agreements
An important strategic factor to consider in the ASEAN is its stance on trade liberalization. The
ASEAN nations are focused on deeper integration among its member states through the
Economic Community integration plan, which aims to create an ASEAN Economic Comm unity
(AEC) allowing the freer movement of goods, services, skilled labour and capital amongst
member countries.
ASEAN countries are involved in two major multilateral trade agreement negotiations: the
Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership
(RCEP). To date four ASEAN countries are involved in the TPP: Singapore, Brunei, Malaysia
and Vietnam along with United States, Mexico, Canada, Chile, Peru, Australia, New Zealand,
and Japan. RCEP’s discussions include all 10 ASEAN countries plus China, Japan, South
Korea, India, Australia and New Zealand.
In October 2011, Canada and ASEAN signed the Joint Declaration between ASEAN and
Canada on Trade and Investment to enhance economic relations between the two areas.
For further information please contact:
Alberta Singapore Office
The High Commission of Canada
One George Street, #11-01
Singapore 049145
Phone: 011-65-6854-5838
Email: [email protected]
July 2015
3