Still in Their Prime

In the busy maternity ward of RSCM, a main public hospital in Central Jakarta’s Salemba area, another newborn—one of an expected 4.5 million in Indonesia this year alone—draws breath and lets out its first cry.

In 2024, nearly a million more babies were born in Indonesia than in the whole of the European Union. Over 280 million people strong, Indonesia is the fourth most populous country in the world—boasting more inhabitants than Russia and Japan put together.

Its growing numbers solidify the broader Southeast Asian region as a dynamic giant comprising 680 million people—one which is still on the good side of the age spectrum.

Apart from Indonesia, two other heavyweights with over 100 million people, the Philippines and Vietnam, are found within the region. Add in large countries like Thailand, Myanmar, and Malaysia to make up the whole of Southeast Asia, and one ends up with nearly 8.4% of the world’s population.

With a median age of just 31, the region is in the middle of a demographic transition. Like elsewhere, birth rates have already dropped—from five or more children per woman not that long ago to two on average—meaning children no longer make up the bulk of the population.

But the region isn’t yet full of pensioners. Instead, it has hit a sweet spot of sorts: a large share of the population is of working age. More workers means more consumers, and more taxpayers. The added bonus? Fewer and fewer dependents, be they young or old.

Still, the dynamics at work within ASEAN countries are far from the same across the board; where these diverge is where matters become interesting.

Age Structure of ASEAN Countries in 2000 and 2022.

Same Region, Different Clocks

Vietnam, the Philippines, and Indonesia are in the thick of this shift, with over half their people of working age and their economies growing by 5–6% each year. They likely have two to three decades left (at which point many will retire) to make the most of these advantages. How they use that time—by creating jobs, building better schools, and attracting investors—is up to them.

It’s often been said that “demography is destiny,” but that’s only half the truth. Young demographics don’t automatically riches make. Myanmar, for example, has strong demographics but remains poor (GDP per capita of 1,190 vs the ASEAN average of 6200).

What counts just as much is good governance, cultural habits, and of course the nation’s geography. Having one or more lucky breaks is one thing, making full use of them to achieve a greater end is another.

Malaysia, one of the richest countries in the region (standing at a GDP per capita of over 14,000, more than double the ASEAN average) is nearing the end of this cycle. More urbanised and with below replacement birth rates for over ten years, it will soon witness the greying of its workforce.

Thailand, among the world’s top tourist spots, has an even higher mountain to climb. With its 65 million people, it now faces one of the most dramatic declines in births anywhere. Last year, its rate fell below one child per woman—lower than even Japan’s—as its population, after having hit a 2019 peak, started to shrink.

Thailand’s demographics curve now looks more like China’s or Taiwan’s, but without their GDP. It therefore risks becoming a prime example of a country which grew old before it ever managed to grow rich.

His country’s state of affairs has caused no small amount of alarm with Deputy Prime Minister Somsak Thepsuthin. “The decline would result in the working-age population decreasing from 46 million to approximately 14 million, severely impacting both economic development and national security,” he warned.

Safe Harbour for Growth

Singapore, a city-state shaped by Chinese culture and sitting on the Strait of Malacca—one of the world’s key sea lanes—is no giant in terms of numbers. But it is in wealth, and can count itself among the richest countries on Earth.

Its birth rate matches that of a rich, dense, mostly Chinese city—very low, much like Thailand’s. It would be lower still if not for its more fecund Malay minority, which makes up 14% of the population.

Still, Singapore has a few strong cards to play. Its wealth gives it ample room to manoeuvre—more money to spend, more reach abroad—than its poorer neighbours. And it can draw on a large pool of skilled talent from culturally related nations like China and Chinese communities across ASEAN.

Southeast Asia holds great promise. Most of the rich world—Europe, East Asia, the English-speaking West—has aged out. However, other places, like the Middle East, Africa, Central America, or Central Asia, may be full of the vigour associated with youth, but they often lack the material assets and practical know-how to translate it into growth.

To put it simply, a country needs more than youth in order to cash in on it. It needs practical basics like sufficient electricity, broad access to the internet, and law and order.

After all, investors must feel safe in the knowledge that there won’t be a coup tomorrow, that gangs won’t torch the ports, that a strongman won’t seize factories, or that war won’t break out with a neighbouring country.

By that yardstick, Southeast Asia stands out. It is by no means spotless, but at present it offers that rare mix of a young population, an expansive and well-maintained infrastructure, and a relatively peaceful region. For now, it may be one of the last good places to bet on.

Statement

Southeast Asia hits a demographic sweet spot. Countries like Indonesia, the Philippines, and Vietnam boast large, young populations and fast-growing economies while much of the developed world ages. But this is an advantage not all ASEAN nations can make use of. Thailand’s and Malaysia’s birth rates are already dropping, as is Singapore’s, but that city state is thriving due to its wealth and global reach. Demography alone won’t guarantee success—stability, policy, and infrastructure matter just as much. Southeast Asia, if it plays its own cards right, may be the last big bet still worth taking.

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