Could Trump Derail a Potential Southeast Asian Infrastructure Boom?

Spending on long-needed infrastructure plans in the Southeast Asian countries of Thailand, Philippines, Indonesia, and Malaysia, could be a boon for their economies. Here’s what they have planned:

  • In the Philippines, President Rodrigo Duterte is promising 8 trillion pesos ($160 billion) of spending over his six-year term.
  • In Thailand, the military-led government plans to list an infrastructure fund on the stock exchange in March.
  • In Indonesia, the government has set aside almost 10 percent more to spend on projects this year.
  • In Malaysia, efforts are pushing ahead with infrastructure plans that include a high-speed rail line from Kuala Lumpur to Singapore.

Infrastructure spending is a massive business. And that could provide big benefits at a time when nations like these are ramping up modernization efforts to cope with the challenges of a growing population.

All told, this is good news for Asia, one my favorite markets on the planet.

All told, good news for Asia, one of my favorite markets on the planet.

But don’t forget: The need to build or revitalize things like transportation grids, telecommunications networks, power supplies and other critical facilities is a pressing concern not just for Asia and other emerging markets, but for advanced industrialized societies as well.

So, as Southeast Asian governments embark on their own programs to boost roads, rails, ports and power plants, will Trump’s global trade policies stifle their abilities to execute their own spending plans?

The fact is for one of his first acts as President, Trump signed an order withdrawing the U.S. from the Trans-Pacific Partnership accord with 11 other nations — making good on one of his protectionist campaign promises.

Will moves like these derail Asian infrastructure spending?

While it’s still too early to say for sure — there are simply too many unknowns — I don’t see it happening.

In fact, all year long, I have been telling my Real Wealth Report members that there is nothing to worry about when it comes to Southeast Asia. I believe that agreements will be reached with the U.S. that work for all.

The Asian growth story is alive and well. And Asian markets are now in the early stages of forming new bull markets. The high demand for the kind of infrastructure projects that I’m talking about here is going to make that growth story even sweeter.

So, adding equity exposure to these countries — especially in global infrastructure shares — could be a home run, when the timing is right.

They are not quite ready for prime time yet, but that time is near.

Best wishes,

Larry

 


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Comments 27

  1. Patricia Bueling January 25, 2017

    Thanks, Larry

    Reply

  2. marc abramsky January 25, 2017

    It is not so much that he is going to derail southeast asia Larry, I think that he will derail the US. What he is proposing requires a strong infrastructure in the US. In other words by repatriating industrial jobs and manufacturing jobs the US consumer needs to be ready to pay more (a lot more) for their products that they consume. They will have to pay more because of the high US wages for people to manufacture. Even if the government raises the minimum wage this is not a boon but a hindrance on business. They can’t afford to compete with wages that high so either they lay people off or they pass the expenses on to the US consumer. So who is left to buy the US products? Broke US consumers and baby boomers no longer willing to spend like they did for the past thirty years? The US trading partners sure as heck can’t afford to pay the higher prices in US dollars even if the dollar is devalued. You said it many times. History repeats. He is doing everything that was done in the 30’s to protect the consumer. However even back then it had the opposite effect. To unravel the current US business model with the world is to invite disaster for a highly indebted country.

    Reply

  3. marc abramsky January 25, 2017

    It is not so much that he is going to derail southeast asia Larry, I think that he will derail the US. What he is proposing requires a strong infrastructure in the US. In other words by repatriating industrial jobs and manufacturing jobs the US consumer needs to be ready to pay more (a lot more) for their products that they consume. They will have to pay more because of the high US wages for people to manufacture. Even if the government raises the minimum wage this is not a boon but a hindrance on business. They can’t afford to compete with wages that high so either they lay people off or they pass the expenses on to the US consumer. So who is left to buy the US products? Broke US consumers and baby boomers no longer willing to spend like they did for the past thirty years? The US trading partners sure as heck can’t afford to pay the higher prices in US dollars even if the dollar is devalued. You said it many times. History repeats. He is doing everything that was done in the 30’s to protect the consumer. However even back then it had the opposite effect. To unravel the current US business model with the world is to invite disaster for a highly indebted country.

    Reply

  4. BC in Europe January 25, 2017

    Al these countries will more likely be better off without the US than with. The economic center of gravity may still be on Wall St., but not for long.

    Reply

  5. BC in Europe January 25, 2017

    Al these countries will more likely be better off without the US than with. The economic center of gravity may still be on Wall St., but not for long.

    Reply

  6. Scott Hartzler January 25, 2017

    this was a great article.

    Reply

  7. Scott Hartzler January 25, 2017

    this was a great article.

    Reply

  8. Pscottparker1 January 25, 2017

    At Weiss, Larry you are the ONLY person who I trust. Your analysis is solid, rational, and I have found it to be very reliable!

    Reply

  9. Paul Livingston January 25, 2017

    Do they have the money? The more money governments borrow and spend, the worse the impact is on economic growth and wealth creation. That’s taking capital away from private hands (consumption and investment) and putting it into government programs (waste, malinvestment, and disincentives to gainful employment). Just think about what the government spends money on. Governments that embraced this kind of social-spending programs end up in bankruptcy .

    Reply

  10. Paul Livingston January 25, 2017

    Do they have the money? The more money governments borrow and spend, the worse the impact is on economic growth and wealth creation. That’s taking capital away from private hands (consumption and investment) and putting it into government programs (waste, malinvestment, and disincentives to gainful employment). Just think about what the government spends money on. Governments that embraced this kind of social-spending programs end up in bankruptcy .

    Reply

  11. ron goddard January 25, 2017

    spot on larry,

    there are innumerable millions of people involved here and resources beyond imagination, and lets not forget the intelligence quotient. there are not many stand alone nations around right now but the asean community can form a formidable force. and why not? these nations have been raped and plundered by europeans for centuries, so maybe its time for them to advance their causes.

    like you i have a great liking for se asian countries, including china. they have their beliefs and customs, alien to ours at times but its theirs. its tough most of the time for people there so lets hope for a much brighter future. nothing is ideal but the dream can keep ’em on track. is america still dreaming?

    cheers, ron

    Reply

  12. ron goddard January 25, 2017

    spot on larry,

    there are innumerable millions of people involved here and resources beyond imagination, and lets not forget the intelligence quotient. there are not many stand alone nations around right now but the asean community can form a formidable force. and why not? these nations have been raped and plundered by europeans for centuries, so maybe its time for them to advance their causes.

    like you i have a great liking for se asian countries, including china. they have their beliefs and customs, alien to ours at times but its theirs. its tough most of the time for people there so lets hope for a much brighter future. nothing is ideal but the dream can keep ’em on track. is america still dreaming?

    cheers, ron

    Reply

  13. M.T. Black January 25, 2017

    Larry, What are some of the infrastructure equities you would look at for investments in regards to this article?

    Reply

  14. M.T. Black January 25, 2017

    Larry, What are some of the infrastructure equities you would look at for investments in regards to this article?

    Reply

  15. jim crawford January 25, 2017

    time is always near never here. the dow closed 20000 today we were still waiting on that pullback

    Reply

  16. jim crawford January 25, 2017

    time is always near never here. the dow closed 20000 today we were still waiting on that pullback

    Reply

  17. Eddie Larry January 25, 2017

    Thanks Larry! I love these countries too but what about the U.S.’s infrastructure boom?

    Reply

  18. espy January 26, 2017

    The TPP was already doomed. It had insufficient support in Congress already even with Democrats. In any case, the TPP was already polluted with rubbish policy completely unrelated to trade.

    In its place, bilateral trade agreements free of the Globalist agenda should be a boon for all partners.

    I see it as a win-win for the USA and all its Pacific partners.

    Reply

  19. espy January 26, 2017

    The TPP was already doomed. It had insufficient support in Congress already even with Democrats. In any case, the TPP was already polluted with rubbish policy completely unrelated to trade.

    In its place, bilateral trade agreements free of the Globalist agenda should be a boon for all partners.

    I see it as a win-win for the USA and all its Pacific partners.

    Reply

  20. Jas January 26, 2017

    How’s the boom in Asia gonna effect the labour theory of value of goods? The theory that the cost or price of a commodity is determined by or can be inferred exclusively from its labor content? Are we about to go through one of the biggest economic booms in history again?

    Reply

  21. Jas January 26, 2017

    How’s the boom in Asia gonna effect the labour theory of value of goods? The theory that the cost or price of a commodity is determined by or can be inferred exclusively from its labor content? Are we about to go through one of the biggest economic booms in history again?

    Reply

  22. Ilham Budi January 26, 2017

    I don’t think the TTP had anything to do with helping Asia build
    infrastructure (which is a China One Belt One Road initiative).

    If anything, the Anglo-Americans will continue to sabotage China’s
    effort to help poor countries build infrastructure (which they have
    already done in Libya and Sudan). Though this issue is hardly on
    Trump’s radar.

    The next Anglo-American effort will see foreign financed NGOs using
    protests to stall China and India financed railways, ports and
    pipelines in Myanmar, designed to bypass the Malacca Straits/South
    China Sea trade routes.

    The Thai-Burma Dawei industrial zone project looks like it has already
    been killed off?

    I wonder what is happening to China’s proposal to widen the Karokorum
    Highway from 30m to 100m?

    China/India/Indonesia/Philippines/Pakistan will presumably (hopefully)
    continue to build infrastructure as if Trump didn’t exist.

    Reply

  23. Ilham Budi January 26, 2017

    I don’t think the TTP had anything to do with helping Asia build
    infrastructure (which is a China One Belt One Road initiative).

    If anything, the Anglo-Americans will continue to sabotage China’s
    effort to help poor countries build infrastructure (which they have
    already done in Libya and Sudan). Though this issue is hardly on
    Trump’s radar.

    The next Anglo-American effort will see foreign financed NGOs using
    protests to stall China and India financed railways, ports and
    pipelines in Myanmar, designed to bypass the Malacca Straits/South
    China Sea trade routes.

    The Thai-Burma Dawei industrial zone project looks like it has already
    been killed off?

    I wonder what is happening to China’s proposal to widen the Karokorum
    Highway from 30m to 100m?

    China/India/Indonesia/Philippines/Pakistan will presumably (hopefully)
    continue to build infrastructure as if Trump didn’t exist.

    Reply

  24. Frank January 26, 2017

    Twitler will derail anything he touches. A dumbass buffoon is now in the White House. Get it?

    Reply

    • eugene pender January 27, 2017

      If you are so hot on Asia, how about giving specific companies instead of broadbrushing 1/3 of the world?

      Reply

  25. ron goddard February 27, 2017

    my wife is a thai national. gorgeous girl and very efficient. we might even live there one day.(in thailand)
    she loves work..i do too..i could watch it all day. she wonders how we could make a decent living in her country.
    i am working on it:-)

    Reply