ASEAN Market Watch: BPO-IT, Automobile Manufacturing, and Indonesian Moves to Join TPP
Rates of recruitment in IT & BPO sectors in several ASEAN countries remains slow
Rates of recruitment in IT & BPO sectors has continued to remain slow in a number of ASEAN member states. The latest Monster Employment Index (MEI) brought the data to light. The MEI, compiled by the online recruitment company Monster Worldwide Inc., measures employment activity in various markets, industries, sectors and ranks country performance accordingly.
Singapore witnessed a -2 percent Year on Year (YoY) rate of growth for September 2015. While is improvement from -10 percent YoY rate of growth for August 2015, the overall growth rate is still falling. However, the pace of the decline has stopped. Among several ASEAN countries, Malaysia was one of the worst performers. The country recorded a -16 percent YoY rate of growth for September 2015. This is worse off than the country’s performance for August 2015, when it witnessed a -14 percent YoY rate of growth. Septembers’ decline marks the steepest fall in the YoY growth rate for the second consecutive month in Malaysia.
Philippines is one of the only countries to witness a positive rate of growth among the ASEAN members. It showed a 3 percent YoY rate of growth for September 2015 and had a 2 percent YoY rate of growth for August 2015. Industry experts, state that among ASEAN countries Philippines is set to maintain its growth. Singapore’s growth trajectory in the sector remains unclear. Meanwhile, Malaysia’s IT-BPO sector is forecast to start growing at a rapid pace after 2020, when major hubs in Kuala Lumpur and Penang are fully developed.
Exploring the automobile manufacturing landscape in ASEAN
ASEAN is currently a hotbed for automobile manufacturing. A number of prominent Japanese automobile manufacturers are currently operating plants for finished cars as well as for parts in a number of ASEAN member states. News reports quoting IHS Automotive, state that the five biggest ASEAN members – Indonesia, Malaysia, Philippines, Thailand and Vietnam – manufactures 6.85 million cars in 2014. IHS Automotive forecast that the figure is set to rise to around 5.28 million cars by 2020.
- Indonesia has 47 plants for finished cars and 770 plants for part makers. The country produces around 1.23 million cars and sells around 1.19 million.
- Malaysia has 68 plants for finished cars and 600 plants for part makers. The country produces around 0.65 million cars and sells around 0.58 million.
- Philippines has 17 plants for finished cars and 320 plants for part makers. The country produces around 1.26 million cars and sells around 0.08 million.
- Thailand has 41 plants for finished cars and 2,200 plants for part makers. The country produces around 1.85 million cars and sells around 0.84 million.
- Vietnam has 39 plants for finished cars and 230 plants for part makers. The country produces around 0.09 million cars and sells around 0.12 million.
A strong export demand is the key behind the prodigious automobile production in the region. A number of Japanese firms such as Toyota, Mazda and Honda are utilizing manufacturing hubs in ASEAN countries to meet their demand and to export to other regions. Manufactures are realizing the growth potential that a number of ASEAN member states have in automobile manufacturing. For instance, Thailand is primed to become a global hub for automobile production and exports. Therefore, they are ramping up investments in the region accordingly.
Indonesia sets out to join Trans-Pacific Partnership
Indonesia is set to join the Trans-Pacific Partnership (TPP). Indonesian President Joko Widodo visited Washington recently. It was the first visit by an Indonesian president to the US after a decade. Indonesia is one of the largest economies in the South East Asian region.
Indonesia has a protectionist economy. Unemployment is one of the biggest problems the country faces currently. 20 percent of its youth are unemployed. Widodo hopes that by joining the TPP it could help the country to fully utilize its economic potential. He also mentioned that his government was dismantling all strict protectionist economic regulations that had barred any kind of foreign investment in the country. It is expected that Obama and Widodo will announce several business deals in the coming months.
The US earnestly pushed countries like Indonesia to join the Trans-Pacific Partnership. This partnership is seen as a move to counterbalance the growing Chinese influence in the region. The TPP is currently made up of 12 countries, which also includes the US and Australia.
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