Increased investment in renewable energy is key to spur sustainable growth in Emerging Asia


Paris, 15 December 2016 – Despite a challenging global environment, the growth prospects of Emerging Asia (Southeast Asia, China and India) remain robust over the medium term, according to the latest edition of the OECD Development Centre’s Economic Outlook for Southeast Asia, China and India.

Real GDP growth in Emerging Asia is expected to remain robust at 6.5% in 2016 and at an average of 6.2% over 2017-2021, driven to a large extent by private consumption. Growth will continue to slow down in China while India is expected to be amongst the region’s fastest growing economies. Growth in the Association of Southeast Asian Nations (ASEAN) region is projected to average 4.8% in 2016 and 5.1% over 2017-2021, led by the Philippines, Viet Nam and the CLM (Cambodia, Lao PDR and Myanmar) countries.

However, international and domestic factors pose downside risks to this outlook. Achieving sustained growth will require Emerging Asian policy makers to manage slowing export growth, the impacts of persistent low interest rates in the advanced economies, as well as plateauing productivity growth in the region.

Demographic and economic growth, among other socio-economic factors, are expected to boost energy consumption in Emerging Asia over the coming decades, according to the Outlook’s special chapter. While fossil fuels will continue to satisfy the bulk of energy demand, the region has adopted specific targets for the deployment of renewable energy capacities, for example solar and wind powers. Policy mechanisms such as feed-in tariffs are fostering the development of renewables that are not yet competitive with conventional energy sources, but setting rates remains a challenge.

“Harnessing Emerging Asia’s enormous potential for renewable energy is vital to mitigate climate change and facilitate the transition to a low-carbon economy. It also provides opportunities for enhanced energy security, job creation and reduced air pollution,” said Mario Pezzini, Director of OECD Development Centre and Special Advisor to the OECD Secretary-General on Development, launching the Outlook today in Paris.

The installed capacity of renewable energy is increasing. Due to their size, China and India are making large contributions to global investment in renewable energy. Among ASEAN countries, Viet Nam, Thailand, Malaysia and Lao PDR are the main contributors, with particularly large investments in hydropower.

Addressing the barriers to investment in renewable energy through adequate policies will be essential for developing alternative energy sources in the region.

According to the report, greenfield Foreign Direct Investment (FDI) enables the transfer of capital, technology and expertise in renewables. India, China and Indonesia have received the largest inflows, accounting for more than 60% of the region’s total. FDI also supports the expansion of green jobs. However, setting the right conditions for the development of renewable energy in Emerging Asia requires addressing the challenges of grid access, administrative barriers and energy pricing mechanisms.


For more information, journalists are invited to contact Kensuke Tanaka at the OECD Development Centre ([email protected]; Tel: +336 27 19 05 19).

For further information on the Economic Outlook for Southeast Asia, China and India 2017, with country-specific policy focuses, visit:

About the report

This edition was produced in collaboration with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Economic Research Institute for ASEAN and East Asia (ERIA). This 2017 Outlook also includes analysis of recent developments in regional integration in twelve key policy areas, as well as country notes addressing domestic-level structural reform priorities in the 10 ASEAN countries.

The Outlook contributes to the OECD Southeast Asia Regional Programme that aims to foster the mutual learning and the exchange of good practices between policy makers in Southeast Asia and OECD countries.



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