Australian businesses risk being left behind in Southeast Asia’s burgeoning economic boom, Foreign Minister Penny Wong has warned, expressing frustration at the lack of private investment in the region, Bloomberg reports.
Wong outlined the concerning trend of declining foreign direct investment in Southeast Asia, noting that figures for 2022, when her Labor Party took office, were lower than those recorded in 2014. Government data reveals that not a single Southeast Asian nation appears in Australia’s top 20 destinations for foreign investment.
“The US is there, China is there, Canada’s there, others are there, and they’re growing, and we will have a diminishing share of a growing market,” Wong said during a speech at an Australian Financial Review conference. “That is not a recipe for either geopolitical weight or economic prosperity.”
Wong’s concerns are fueled by the observation that corporate ties between Australia and its northern neighbors have seen minimal progress, despite Southeast Asia’s projected status as the world’s fourth-largest economy by 2040, driven by a burgeoning population.
Adding to the urgency, Australia’s key trading partner, China, is experiencing an economic slowdown, causing a significant drop in the price of iron ore, Australia’s largest export. Meanwhile, the global shift towards clean energy continues to erode Australia’s coal industry, further emphasizing the need for diversification.
While Australia has taken steps to strengthen diplomatic ties with Southeast Asian and Pacific nations since 2022, including a A$95 million ($64 million) investment package announced by Prime Minister Anthony Albanese, Wong’s call for increased private sector engagement underscores the need for a more proactive approach.
“Southeast Asia is critical for Australia’s prosperity and security,” stated former Macquarie Group CEO Nicholas Moore, who was commissioned to develop a Southeast Asian economic plan for Australia.
He dismissed concerns about volatility in the region, highlighting the substantial opportunities for Australian businesses.
