Asia's tiniest economies set to expand at rapid pace

A Cambodian with his morning glory harvest in Phnom Penh yesterday. Cambodia, together with Myanmar and Laos, are looking to Vietnam to provide the template for transforming their economies from agricultural to export-led ones.
A Cambodian with his morning glory harvest in Phnom Penh yesterday. Cambodia, together with Myanmar and Laos, are looking to Vietnam to provide the template for transforming their economies from agricultural to export-led ones.PHOTO: AGENCE FRANCE-PRESSE

Cambodia, Laos, Myanmar expected to grow fastest in region after India from 2017-19

MAKATI • Asia's smallest economies are growing faster than giants such as China, according to the World Bank.

Cambodia, Laos and Myanmar will post the most rapid expansions in Asia after India from this year to 2019, sustaining growth rates of close to 7 per cent, according to forecasts released this week.

Among the least developed countries, the combined size of the three economies is less than US$100 billion (S$143 billion), about a third of neighbours like Singapore, Malaysia and the Philippines.

Located in the Mekong region, South-east Asia's frontier nations are increasing their infrastructure drive to boost growth and diversify their economies as they shed their image as the region's backwater.

Vietnam, which has transformed its economy from a farming one to an exporter of electronic goods like smartphones, stands as their role model, said Ms Eugenia Victorino, an economist at Australia & New Zealand Banking Group in Singapore.

"The promise of transforming the Mekong into a manufacturing hub has a lot of potential," Ms Victorino said. "Vietnam provides the template for an export-led growth from agricultural. We have seen Myanmar, Laos and Cambodia trying to imitate Vietnam's model of luring FDI to prop up their export capacity."

They are counting on China, which is investing in everything from railroads to real estate in the three countries.

  • 7%

    Growth rates of Cambodia, Laos and Myanmar.

  • US$100b

    Maximum combined size of the three economies, equivalent to S$143 billion.

After decades of military rule, Myanmar is liberalising its economy and adopting market reforms after a transition to democracy. China is its largest trading partner and is building a special economic zone, power plant and deep- water seaport on the west coast.

In Laos, a long-delayed US$5.7 billion railway from China through northern Laos officially began last month,  the Global Construction Review reported. 

Cambodia has gained particular appeal for Chinese manufacturers seeking to relocate, which aligns with China's strategy to export industrial capacity through initiatives such as its One Belt, One Road programme. 

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A version of this article appeared in the print edition of The Straits Times on January 14, 2017, with the headline 'Asia's tiniest economies set to expand at rapid pace'. Print Edition | Subscribe