牛津经济研究院-东南亚农业食品部门的经济影响（英）-2021.7-72页_10mb

AGRI-FOOD SECTOR IN SOUTHEAST ASIA: 2021 SUMMARY

Core Content

The agri-food sector plays a critical role in the economies of Southeast Asia, contributing significantly to GDP, employment, and tax revenues. This report provides an analysis of the sector's economic impact across four major countries: Indonesia, the Philippines, Thailand, and Vietnam, and explores the challenges and risks it faces in the post-pandemic era.

Main Points

Economic Impact in 2019

• Total GDP Contribution: The agri-food sector contributed USD 717.5 billion to the GDP of the four countries in 2019, representing a 30% increase from 2015 (USD 610 billion).
• Employment: It supported 127 million jobs, accounting for 40–50% of total employment in each country.
• Tax Revenue: The sector generated USD 95.6 billion in tax revenues, equivalent to 28% of total tax revenue in the region.

Country-Specific Contributions

Key Economic Indicators

• Indonesia: The agri-food sector accounts for 57% of its GDP contribution and 40.2 million jobs.
• Thailand: Agricultural production contributes 212.8 billion USD to GDP and 13.2 million jobs.
• Vietnam: The sector contributes 86.4 billion USD to GDP and 27.5 million jobs.
• Philippines: The agri-food sector contributes 126.7 billion USD to GDP and 18.0 million jobs.

Trade Position

• Indonesia: Agri-food trade surplus of USD 14.4 billion.
• Thailand: Agri-food trade surplus of USD 21.0 billion.
• Vietnam: Agri-food trade surplus of USD 9.7 billion.
• Philippines: Agri-food trade deficit of USD 6.2 billion.

Impact of COVID-19

• In 2020, the agri-food sector experienced mixed impacts:
  • Indonesia and Vietnam: The sector grew by 2% and 4% respectively, in real terms.
  • Thailand and the Philippines: The sector's total economic contribution shrank, but by less than the overall GDP decline, highlighting its essential role in the region's economy.
• F&B Distribution was most affected, with an estimated 910,000 jobs lost.
• The pandemic has left a legacy of unemployment, underemployment, and reduced household incomes, which will depress consumer spending in 2021.
• Tourism accounts for 9.5% of food consumption in Thailand and 8.8% in Indonesia, and is expected to take longer to recover.

Outlook for the Agri-food Sector

• Constraints on Food Supply: Disruptions in transportation and physical distancing measures could lead to rising costs.
• Economic Slowdown: Reduced demand is expected to depress food consumption.
• Longer Term Challenges:
  • Rising incomes and urbanization are increasing demand for better quality food.
  • There is a need for technological innovation, skills development, and policy support to improve land and labor productivity.
  • Environmental sustainability is a growing concern for the region's food value chain.

Fiscal Policy Risks

• Fiscal Adjustment Pressures: Governments are under pressure to restore fiscal positions, which may involve tax increases and spending cuts.
• Excise Taxes: Poorly designed excise taxes on sugar, salt, and plastics could harm recovery by:
  • Disproportionately affecting small businesses.
  • Unintended damage to local industries.
  • Burdening low-income households.
  • Failing to generate sufficient fiscal revenues.
• Fiscal Risk Framework:
  • Highlights the need for well-designed, targeted, and evidence-based tax policies.
  • Emphasizes the importance of education and public information, comprehensive regulatory scope, and consultation with industry stakeholders.

Conclusion

The agri-food sector is a cornerstone of Southeast Asia's economy, providing employment, income, and stability. However, it faces short and long-term challenges, including the economic fallout from the pandemic, fiscal policy risks, and pressure to adapt to changing consumer demands. A strategic and inclusive approach is essential to ensure the sector's resilience and sustainable growth.

Key Recommendations

• Avoid abrupt fiscal adjustments that could harm the agri-food sector.
• Implement well-structured excise taxes with careful planning and communication.
• Invest in technology and skills to enhance productivity and sustainability.
• Strengthen policy frameworks to support the sector's recovery and future development.