MACROECONOMIC DYNAMICS: A COMPREHENSIVE ANALYSIS OF POVERTY ALLEVIATION IN ASEAN NATIONS

Abstract

Poverty remains a persistent challenge in the economies of the world, including the member states of the Association of Southeast Asian Nations (ASEAN). Since its inception in 1967, ASEAN has aspired to alleviate poverty as one of its core objectives in pursuit of prosperity and social progress. Despite significant efforts outlined in various ASEAN Blueprint Roadmaps, a substantial portion of the population in ASEAN member states continues to live below the poverty line, with an estimated 120 million individuals, nearly a quarter of the ASEAN population, struggling to survive on less than US$1.90 per day. Notably, Indonesia and the Philippines stand out with the highest poverty rates, contributing to around 90 percent of the impoverished population within the ASEAN integration. To address this critical issue, ASEAN governments have maintained favorable foreign investment climates (FDI), aimed for annual economic growth rates of five percent, and controlled inflation and unemployment. The role of FDI as a catalyst for positive impacts, including job creation, has been highlighted. The integration of the ASEAN Comprehensive Investment Agreement (ACIA) in 2009 has been instrumental in prioritizing the allocation of FDI inflows among member countries. This study examines the effectiveness of FDI in poverty alleviation within ASEAN, exploring its role in driving economic growth and job creation. By analyzing data from ASEAN Statistic Annual Reports and existing research, we assess the potential for FDI to significantly contribute to the reduction of poverty in the region.