ASEAN Economic Issues (December 2023)

1. ASEAN-Korea Key Statistics

Korea’s Trade to ASEAN countries

Unit: 1 million (USD)

Country/Region	October 2023			October 2022	2022
Country/Region	Export	Import	Total	Total	Total
Total (Korea)	55,083	53,456	108,539	111,595	1,414,954
ASEAN	10,554	6,314	16,868	15,880	207,418
Brunei Darussalam	3	3	6	3	345
Cambodia	44	30	74	73	1,051
Indonesia	657	798	1,455	1,981	25,951
Lao PDR	9	5	14	8	150
Malaysia	996	1,287	2,282	2,037	26,723
Myanmar	333	66	399	112	1,013
Philippines	821	410	1,231	1,306	17,484
Singapore	2,257	882	3,139	2,119	30,553
Thailand	601	568	1,169	1,169	16,461
Vietnam	4,834	2,265	7,099	7,071	87,688
China	10,990	12,548	23,538	25,568	310,366
Japan	2,507	3,933	6,440	6,573	85,318

Reference: Korea Customs Service

(Overview) Korea exported USD 55.1 billion (5.1%), imported USD 53.5 billion (-9.7%), and recorded a trade surplus of USD 1.6 billion. In October, exports turned positive for the first time in 13 months, marking the largest monthly increase in exports this year.

(By country) Exports to Singapore (70.5%), the United States (17.3%), and Japan (10.3%) increased, while to China (-9.6%) and Vietnam (-2.5%) decreased.

(By category) Exports in passenger cars, petroleum products, and ships increased, while semiconductors and auto parts decreased.

(Korea’s trade surplus) ASEAN (USD 4.24 billion), United States (USD 3.87 billion), Vietnam (USD 2.57 billion), and Singapore (USD 1.37 billion).

(Policy Direction)According to a press release from the Ministry of Trade, Industry and Energy (MOTIE), the positive turnaround in exports in October was the result of the efforts of both exporters and government departments, emphasizing that it was achieved despite difficult external conditions such as US-China competition, supply chain reorganization, Israel-Hamas conflict, and high oil prices. “We will make every effort to ensure that our exports surpass the Golden Cross and continue their upward momentum by the end of the year,” the Minister stated. (Link)

2. Talking ASEAN Webinar on “Revisiting the 43rd ASEAN Summit: The Prospect of Continuity between Indonesia and Laos’ ASEAN Chairmanships” (27 September 2023, The Habibie Center) (Link)

(Moderator) Herawati, Researcher, ASEAN Studies Program, The Habibie Center
(Speakers) H.E. M.I. Derry Aman, Permanent Representative of Republic of Indonesia to ASEAN; H.E. Bovonethat Douangchak, Ambassador Extraordinary and Plenipotentiary, Permanent Representative of Lao PDR to ASEAN; Kornelius Purba, Managing Director, The Jakarta Post

1) Key Achievements and Expectations of the 2023 ASEAN Chairmanship (presented by Ambassador Derry Aman, Indonesia)

Among the subject of the chairmanship, emphasis was placed on the ‘Epicentrum of Growth’ including areas such as △ food security, △ energy security, △ regional health initiative, △ financial stability, and △ EV ecosystem development.
Indonesia has primarily concentrated on mainstreaming and executing the ASEAN Outlook on the Indo-Pacific (AOIP). This effort includes the arrangement of ASEAN’s inaugural Indo-Pacific Forum in Jakarta on September 5-6. The objective is to pinpoint feasible cooperation projects with partner countries within the four priority areas of AOIP, namely maritime cooperation, connectivity, SDG 2030, and the economy.
* 96 speakers, 2,500 attendees, 16 companies participated (93 projects (with a scale of USD 38.2 billion), 17 potential projects (with a scale of USD 17 billion)).
The 42nd ASEAN Summit adopted 11 outcome reports on substantive areas such as food security, financial stability, groundwork for building an EV ecosystem, and objectives for ASEAN Vision 2045. Additionally, the 43rd ASEAN Summit endorsed over 90 outcome reports, not only within its own summit but also through the ASEAN+1, APT, and EAS summits.
Regarding Timor-Leste’s accession to ASEAN, following the agreement made in principle in 2022, Timor-Leste has been participating in the majority of ASEAN’s meetings, including those at the ambassadorial level, foreign ministers’ meetings, and summits, as an observer to familiarize with the ASEAN process.

2) Themes and Key Areas of Cooperation for the 2024 ASEAN Chairmanship (presented by Ambassador Bovonethat Douangchak, Lao PDR)

Lao PDR will hold the ASEAN chairmanship for the third time next year with the theme of “Enhancing Connectivity and Resilience” to continue the efforts in building the ASEAN Community.
The key priorities were presented as follows: strengthening regional connectivity, enhancing external cooperation, reinforcing ASEAN integration and centrality amid the evolving regional situation, bridging the development gap between nations, fostering inclusive economic growth, promoting digitization, enhancing human connectivity, addressing climate change, empowering women’s capacity, and advancing regional health development. In the realm of socio-cultural cooperation, the plan is to explore collaborative measures focusing on culture and the arts, strengthening ASEAN’s inclusive role and environmental collaboration, as well as prioritizing health promotion within an economic context.
The above logo blends four colors symbolizing the ASEAN flag and its elements, including a circle that signifies ASEAN’s global partnerships. The letter C within the circle denotes Connectivity, while the letter R represents Resilience. Starting January 1 of the upcoming year, Lao PDR intends to feature this logo in all ASEAN meetings and employ it in media campaigns to enhance public understanding of ASEAN.

3. The 29th ASEAN Transport Ministers Meeting and 14th ASEAN and ROK Transport Ministers Meeting (9-10 November 2023, Luang Prabang) (Link)

(Chairman) H.E. Ngampasong Muongmany, Minister of Public Works and Transport of Lao PDR
(Vice-Chairman) H.E. Loke Siew Fook, Minister of Transport of Malaysia

A Joint Ministerial Statement was adopted as the outcome report of the ASEAN Transport Ministers’ Meeting. Additionally, the ASEAN Sustainable Aviation Action Plan (ASAAP) and Work Plan 2023-24 were adopted to strengthen the ASEAN Single Aviation Market. Furthermore, discussions were held on improving regional EV infrastructure, enhancing road connectivity, facilitating seamless multimodal transportation for cross-border goods movement, strengthening resilience in maritime supply chains, and enhancing close coordination with dialogue partners. Additionally, there were exchanges of views on exploring collaboration opportunities by integrating tourism and the transportation industry. The 33rd ASEAN Transport Ministers’ Meeting will be held in Malaysia in 2024.
Meanwhile, the 14th ASEAN-Korea Transport Ministers’ Meeting adopted the ‘Joint Declaration on Comprehensive Cooperation on Smart Mobility in the Future of ASEAN and Korea.’ MOLIT explained that Korea will share ‘Korean smart mobility technologies’ such as electric and hydrogen vehicles and eco-friendly public transportation systems to enhance mobility and connectivity in ASEAN countries and improve the quality of life of people in the region. It will also be a follow-up to the Korea-ASEAN Solidarity Initiative (KASI) announced by the Korean government and is expected to contribute to the establishment of the ASEAN-Korea Comprehensive Strategic Partnership (CSP) next year.

4. World Economic Outlook for 2024 (14 November 2023, KIEP) (Link)

Korea Institute for International Economic Policy (KIEP) has projected the global economic growth rate for the year 2024 to be 2.8%, which is 3.0% lower than that of 2023. Keywords for this outlook are ‘pulled-back capacity’ and ‘pressure-driven growth.’ The forecast anticipates △ a medium to long-term entry into a low-growth path for the Chinese economy, △ a decline in growth due to the dual effect of high debt and high interest rates, and △ downward factors such as worsening geopolitical conflicts and additional supply shocks. While India, Russia, Brazil, and other major emerging economies are expected to adjust their growth rates upward, with China leading the way, ASEAN countries are generally expected to experience economic underperformance.

1) Economic Growth Rate: In the second quarter of 2023, the economies of key Southeast Asian countries failed to recover from a downturn due to factors such as a decline in external demand leading to poor export performance, and a slowdown in manufacturing growth. However, Indonesia and Vietnam experienced a slight increase in economic growth rates, driven by positive consumer spending trends despite the overall economic challenges.
2) Current Balance: In the second quarter of 2023, excluding Malaysia and Vietnam, most of the key Southeast Asian countries recorded a current balance deficit.
3) Key issue: Southeast Asia exhibits a high dependence on China in terms of exports and foreign direct investment (FDI). There is a possibility that the slow economic growth in China could lead to a slowdown in Southeast Asia’s industries and exports.
* As of the first half of 2023, the dependence of key Southeast Asian countries on exports to China ranges from 11.8% to 21.0%, indicating a relatively high level. Particularly noteworthy is that the proportion of exports to China in Indonesia, Vietnam, and the Philippines exceeds 15%.
Outlook for ASEAN Key Countries in 2024

1) Indonesia: Expecting a slight decrease in economic growth to 4.8% in 2024 compared to 2023, attributed to the anticipated decline in the export sector. This is influenced by the stabilization of prices for key export commodities and the subdued growth forecast for China, the primary export destination.
2) Malaysia: Expecting a slow recovery in external demand due to anticipated interest rate increases in major advanced economies and the subdued economic outlook in China. Consequently, there is a forecast of a 4.4% growth in Malaysia’s economy in 2024.
3) Philippines: Anticipating export challenges due to a decrease in external demand, along with weakened consumption and investment caused by the high-interest rate environment. Therefore, the economic growth rate for 2024 is forecasted to be 4.8%.
4) Thailand: Anticipating subdued commodity exports due to the economic slowdown in major export destinations. Nevertheless, the economic growth rate for 2024 is projected to reach 3.7%, driven by an expedited recovery in the tourism sector and an expansion of private consumption.
5) Vietnam: Expecting to sustain growth based on stable macroeconomic conditions and domestic demand. However, depending on external factors, growth is projected to be around 5% in 2023 and around the mid6% range in 2024.