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THE Southeast Asian region is believed to still be able to attract foreign investment or foreign direct investment (FDI) amid the “America First” policy echoed by the President-elect of the United States (US), Donald Trump.
UOB’s Asean Economist, Enrico Tanuwidjadja, is optimistic that the Asean region will continue to attract quality investments from the global market. According to him, foreign investment coming into the region is mainly related to the global diversification strategy in the manufacturing process, including the technology sector.
“Sectors that target the young and emerging middle class market will also enter (ASEAN). This is because it is related to the potential for higher consumption growth from these classes,” Enrico said in the Macroeconomic Outlook Virtual Media Briefing for 2025, Thursday (12/05), 2024.
Enrico said that ASEAN is also a region with great potential that has not been fully realized in the consumption sector. According to him, this is because the consumption sector is not the target of tariff policies, which are likely to target high value-added sectors such as technology.
He explained that in order to monetize and realize this prospect, the ASEAN economy must be ready to carry out optimal and continuous structural transformation in the area of human resource upgrading. In addition, ASEAN countries must also create clearer rules and regulations that do not make it difficult for potential investors.
“ASEAN also needs to attract the right kind of investment in developing areas,” he said.
Meanwhile, Julia Goh, Senior Economist (Malaysia), UOB, added that Donald Trump’s “America First” policy would open up more opportunities and accelerate the shift in the supply chain. This is in line with the US efforts to increase its separation or decoupling from the Chinese market.
On the other hand, Juliah Goh also warned of the possibility of secondary sanctions and export controls against countries involved in the China Plus One policy. This trend will be shaped by the actual policies implemented by Trump 2.0. ASEAN needs to navigate these steps carefully. [sources/photo special]
