Economic Growth and Power Sector Developments in South East Asia

Abstract

In recent years, many South East Asian nations have shown strong economic growth coupled with success in attracting considerable direct foreign investment. In order to sustain the current and projected growth levels, many countries in South East Asia will need to focus on major investments for infrastructure development, especially in their power generation and distribution sectors. As highlighted by the current financial crises being experienced in several South East Asian nations, the future growth of this region will require much stronger support from the international financial institutions, which in turn will lead this region toward a greatly increased level of privatization. The establishment of contestable energy markets is a particularly good example of the type of developments required in these nations. In order to create a healthy climate for the massive financial investment needed for a truly liberalized energy market, a number of difficult political and social issues common to many of these rapidly developing economies must be resolved.