Did you know that jackfruit is used in craft beer brewing in Southeast Asia? It’s this scary-looking fruit found abundant in the region. They weigh around 20 to 30 pounds (9 to 14 kg), though some can reach up to 100 pounds (45 kg), making them one of the largest fruits in the world.

Although the fruit itself has a sweet mango-apple-like flavour with subtle banana notes, once added to beer in small quantities (4g/L), it leaves a hint of mango-like flavour.

This week, we look at what’s been happening in the region’s politics to set the tone, look at economic insights to understand the drivers, and subsequently dive into infrastructure and food business.

Appetisers

• 🇻🇳 🏝️ Vietnam's intensified efforts in the South China Sea

• 🇮🇩 🏭 Indonesia well below the developed country target by 2025 (7% GDP growth for 15 consecutive years)

• 🇮🇩 🏥 Australia’s Ramsay Health Care exit Indonesia with a $1.9B sale

• 🇸🇬 🚗 6% less Singaporean households using cars between 2012 and 2022

• 🇻🇳 🌊 Vietnam added 330 acres to the disputed Spratly Islands in the South China Sea, 200% more than the previous decade combined. This signifies an escalation in the region's territorial disputes. The South China Sea, a highly contested waterway with over US$3 trillion in annual trade, sees competing claims from China, Brunei, Malaysia, the Philippines, Taiwan, and Vietnam.

• 🇵🇭 🇺🇸 The Philippines and the United States have signed a nuclear technology transfer agreement and incorporate nuclear power into the Philippines’ energy mix by 2032. The country considers it an alternative to coal and aims to alleviate seasonal power outages.

• 🇹🇭 🏳️‍🌈 Thailand may be the third country in Asia to allow same-sex marriage after Taiwan and Nepal. The draft law is subject to parliamentary approval on 12 Dec.

• 🇲🇲 ⚔️ Myanmar’s 3-year military coup continues to have broader societal and economic repercussions, such as power cuts, middle-class outward migration and the rise in crime.

• 🇻🇳 🇨🇳 What is the ‘China+1’ strategy for foreign investors? It may be a complementary relationship between China's Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and Vietnam. $1.95 trillion GDP

  • GBA: High-tech manufacturing and innovation hub, with strengths in electronics and technology, Average Labor Cost: US$6 per hour

  • Vietnam: Strategic geographical position and government reforms favouring cost-effective manufacturing and foreign investment, Average Labor Cost: US$3 per hour

• 🇦🇺💲Southeast Asia’s largely underbanked population of 350 million presents vast opportunities for Australian investors, estimated at 50% of the region’s population. The digital economy alone will grow at 20% YoY to $330 billion in Gross Merchandise Value in 2025.

• 🇻🇳 🇦🇺 Australia's two-way trade with Vietnam in 2022 was valued at A$25.7 billion, a 62% increase from 2020-2021 and marking Vietnam as Australia's 12th largest trading partner. Vietnam's market-based economic reforms and a growing middle class have fueled demand for imported goods. Australian exporters in Vietnam face intense competition and non-tariff barriers, requiring a deep understanding of the local market and business culture.

• 🇮🇩 📈 Indonesia’s 5% GDP growth forecast will be the second fastest in the world in 2024. India will achieve 6.2% and Saudi Arabia will reach 4.6%.

• 🇮🇩 🇦🇺 Incitec Pivot (ASX: IPL), an Australian explosives and fertilizers group ($6B Rev, $0.3B NP), is in the process of selling its fertilizer business, possibly to Indonesia’s Pupuk Kaltim. The sale, if completed, could enhance Indonesian investment in Australia and integrate agriculture supply chains between the two countries.

• 🇻🇳 ✈️ Vietnamese low-cost carrier Vietjet doubles its Australian services, expanding from 26 to 48 flights per week starting December 2023. The expansion includes daily flights from Ho Chi Minh City to Melbourne and Sydney and five weekly flights to Brisbane.

• 🇹🇭 ✈️ Thailand plans the launch of five new airlines in 2024, connecting secondary cities and exclusive resort destinations, like Ko Lipe in Satun province.

• 🇲🇲 🇨🇳 The Chinese-led US$7.3 billion Deep-Water Port development in Kyaukphyu, Myanmar could provide China with an alternative land route to the Strait of Malacca route. The Strait of Malacca route currently carries 25% of the world’s traded goods and 80% of China’s energy needs. Some concern that the port, owned 70% by China over a 50-year lease, could be used for both trade and military purposes.

  • Mini-insight: China owns US$1.5 billion oil and gas pipelines running from Kyaukphyu to Yunnan, China’s southernmost province bordering Myanmar, Thailand and Vietnam.

• 🌏🚄 Read Southeast Asia Railways Report 2023 by James Clark of Future Southeast Asia, which is a list of national railway projects under construction or that have been in the news over the last year.

  • Mini-insight: This signifies a transformative phase towards economic growth and regional integration. However, challenges exist due to Chinese funding influence in the region and debt management in the inflationary environment.