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ASEAN Nations Bear Annual Losses of $17B Due to Supply Chain Disruptions


Ongoing supply chain disruptions in the ASEAN region cost the region a staggering $17.01 billion annually. These disruptions are brought on by various factors, including China’s COVID-19 strategy and global geopolitical tensions, as per the analysis by a business transformation consultancy.

The business transformation consultant highlighted that these disruptions have an average global impact of 0.47% on business revenue.

In contrast to smaller economies like Brunei and Myanmar, the research showed that negative supply and demand shocks severely impacted Singapore, Malaysia, and Thailand.

Despite this, it is estimated that ASEAN’s GDP would more than double over the next 20 years, reaching $13.3 trillion by 2040 owing to both exports and local demand. According to the business transformation consultancy, the reopening of China in December has significantly relieved pressure on international brands who continue to manufacture out of Asia. That is a hopeful indicator of further recovery from the massive strain on global supply networks.

The supply chain disruptions, notably in 2022, have heightened interest in ASEAN’s role in forecasting future volatility in the global supply chain environment. As a result, firms are increasingly adopting a ‘China Plus One’ strategy, expanding their activities outside China, such as production centers and warehouses.

Malaysia, India, Thailand, and Vietnam are now the top choices for enterprises looking to establish themselves as global manufacturing and transportation hubs.

Although all of this benefits the area, it also means that businesses in the region should be even more vigilant when it comes to maintaining supply chain resilience, cited the business transformation consultancy.

ASEAN cannot afford to rest on its geographic, regulatory, economic, and demographic advantages if it is to maintain its dominance in global commerce. Since supply chains live on predictability, the ability to remove as much uncertainty as possible through a resilient supply chain is critical, added the business transformation consultancy.


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