The first thing you saw last year after walking out of Manila’s international airport was an expressway flyover construction project. It wasn’t scenic, and detours due to construction might have set back your taxi ride to the hotel in an already infamously congested city. But the 11.6-km project, the NAIA Expressway, opened at year’s end as a typical case of basic infrastructure work that is pushing the Philippine economy to expand faster than a lot of its peers around Asia.
The Philippines is just one growth engine for the region stretching from Japan to Singapore, and infrastructure booms are just one source of booming economies. Here are the countries that the World Bank projects will grow fastest in East Asia and the Pacific this year:
1. Laos. This impoverished country with a strict Communist government will grow 7% this year because of investment in the power sector and deeper integration with the 10-member Association of Southeast Asian Nations, the World Bank The landlocked country of about 7 million people is improving its power network to provide electricity to 10% of households by 2020 and possibly export it as well, according to the Department of Energy Business website. Laos has also made it easier to do business. The 2016 GDP stood at $13.7 billion.
2. The Philippines. It’s not just the expressway that will push Philippine GDP growth upward by 6.9% this year, per the World Bank’s estimate. Public infrastructure spending will hit a record high of $17.7 billion, more than 5% of the GDP, Philippine News Agency says. The country of 102 million people should see “faster and more effective roll-out of tax reform and government infrastructure projects and public-private partnerships,” adds Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in Metro Manila. Infrastructure spending combined with older economic drivers such as remittances from overseas, consumer spending and call centers will expand an economy worth $311 billion economy last year. Once the airports and rail systems start coming online, foreign-invested factories will find thing easier and tourists — always a core part of the Philippine economy — will find getting around easier.
3. Cambodia. The World Bank forecasts the $19.4 billion economy of this small Southeast Asian country to expand 6.9% this year. It cites exports following a “sizable foreign direct investment” into the garment sector, as well as real estate and construction projects. Some garment factories have shifted from Vietnam because labor in Cambodia is even cheaper. The value of garment exports reached $6 billion in 2015, worth 70% of all exports, and employed 700,000 people, according to Research and Markets. Like Laos, Cambodia has also made doing business easier, the World Bank says.
4. Myanmar. Another country expected to grow 6.9% this year, the former military dictatorship that just opened to foreign investment in 2012 will keep that advantage as well as domestic private sector investments, the World Bank says. The country with a 2016 GDP of $68.3 billion has lured foreign investors with its natural resources, young workforce and pro-business changes to laws. A lot of foreign-funded projects cover energy, garment production and food and beverages.
5. China. Although the World Bank’s projected 2017 growth rate of 6.5% marks a growth slowdown from last year’s 6.7% — already a 26-year-low — the world’s second largest economy will keep expanding. That’s most likely due to fiscal stimulus, attention to new infrastructure such as bridges and roads as well as continued focus on export manufacturing. Those engines that have run China since the 1980s will keep going despite pledges from government officials to push both aside in favor of private investment and consumer spending. Foreign investment is expected to grow 15% this year, up from 4.1% in 2016.