Penny Wong, Foreign Minister

When we came to government, Australian direct investment in Southeast Asia was lower than it was in 2014.

Over this period, while international investment in the region had grown apace, Australia’s investment in it had gone backwards, both in relative and absolute terms.

In 2022, Southeast Asia's combined nominal GDP was around $5.2 trillion—larger than the economies of the United Kingdom, France or Canada.

And by 2040, Southeast Asia is predicted to be the world’s fourth-largest economy after the United States, China and India.

We have a good foundation in our free trade agreements across the region, but Australia's trade and investment has simply not kept pace – and we need to turn this around.

I feel like I say this over and over again and people look at me and nod and move on.

I just want to give you some statistics that explain how we’re being left behind.

If we go back to 2001, between 2001 and 2021, the annual growth rate in the region averaged 8.5 per cent. Our trade, on average, grew 5.5 per cent a year.

So, our trade is not keeping pace with growth, and it is insufficiently diversified to maximise benefit.

Our investment is similarly underweight.

ASEAN’s share of foreign direct investment (FDI) stocks from Australia fell from 6.3 per cent in 2017 to 2.9 per cent in 2022. That's actually a remarkably small fraction, remarkably small fraction of our total global investment.

But in comparison, Southeast Asia's share of global FDI has increased over the past two decades from 3.6 per cent to 6.9 per cent.

So, the rest of the world is investing more.

Between 2000 and 2021, Southeast Asia's global inflows of direct investment stock increased by 13 per cent, on average, a year.

Our investment stocks increased by 8 per cent a year over the same period.

Again, we're simply not keeping up.

Others are. Between 2016 and 2020, US and China investment both doubled into Southeast Asia and over the same period, Canada quadrupled.

So, this backdrop, is why we appointed Nick Moore as Australia's Special Envoy to Southeast Asia, and for developing a first-class Southeast Asia Economic Strategy to 2040. 

We have started to deliver on a number of measures in response to the Strategy.

The $2 billion Southeast Asia investment financing facility is up and running. Export Finance Australia is developing a pipeline of projects to boost Australian investment in Southeast Asia - particularly in clean energy transition and infrastructure development.

We have established new deal team hubs in Jakarta, Singapore and Ho Chi Minh City and offices in Hanoi, Bangkok, Kuala Lumpur, Manila, Phnom Penh and Bandar Seri Begawan to connect Australian investors with opportunities in the region.

In the June quarter, our deal teams engaged 157 Australian companies and institutions to discuss plans for the region and investment opportunities, and facilitated the largest ever Australian investor delegation by value to Singapore and Vietnam.

Austrade have had their best ever client results in Southeast Asia this year, with over $1 billion in commercial outcomes since the beginning of 2024.

We have opened new landing pads in Jakarta and Ho Chi Minh City to help more Australian startups engage and enter new markets in the region, building on the successful landing pad in Singapore.

Our senior Southeast Asia Business Champions, including Shemara Wikramanayake, Jennifer Westacott, Tony Lombardo, Shayne Elliot and Peter Fox are actively working with Australian businesses on the opportunities and leading high-level business delegations to the region. I thank them for their work, and their leadership.

Under the Southeast Asia business exchange, we have undertaken business missions to Singapore, Malaysia, the Philippines, Thailand, Indonesia and Vietnam, with more to come in the next few months.

And we have improved visa access for businesspeople from Southeast Asia.

What I would say to the business community, is that no one today could claim they don’t understand the risk of putting too many eggs in one market.

Whilst our Government's initiatives are designed to make it easier for Australian business to get established in new markets, it is up to business, smart business to take the opportunities we have created through this Strategy.

Penny Wong is the Minister for Foreign Affairs. This is an edited extract of her address to The Australian Financial Review/Asia Society Australia Asia Summit. 

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