The fifth issue of the AREO, which provides AMRO staff’s assessment of both the conjunctural and structural issues within the ASEAN+3 region, coincides with the organization’s tenth anniversary. The AREO 2021 is based on information available as of February 28, 2021.

The first chapter covers the challenges, opportunities, and policy options facing the ASEAN+3 economies as they recover from the COVID-19 pandemic. It assesses the key short-term risks to the outlook, which are still very much driven by pandemic developments. The uneven recovery between the external and domestic sectors and within the domestic economy is also analyzed, along with its implications for financial stability. Lastly, the chapter discusses policymaking that will have to gradually shift from protecting lives and livelihoods to safeguarding an inclusive and sustainable recovery.

The second chapter, which typically analyzes longer-term structural issues confronting the ASEAN+3 region, looks at the related issues of global value chain (GVC) reconfiguration and technology bifurcation. It examines the forces that are reshaping GVCs going forward and what regional economies can do to take advantage of any potential reconfiguration. The chapter also discusses the new digital technologies that will transform production processes and reshape GVCs, beginning with how the pandemic has accelerated digital transformation across businesses.