ASEAN’s Role in Shaping the New World Order: Insights from Panel Discussions

Singapore – A critical shift in economic thinking is needed within the Association of Southeast Asian Nations (Asean), according to prominent voices at the Asia Future Summit on October 9th. Experts are arguing that the region must evolve past its role as a global production center to ensure lasting prosperity in an era defined by growing protectionism and a reshaping of international power structures.

The Fading Export Model

Discussion at the summit revealed increasing concern that Asean’s long-standing reliance on export-driven industrialization is losing its effectiveness.This trend coincides with escalating trade barriers imposed by the united States, rapid technological advancements, and the increasing influence of artificial intelligence – all forces significantly altering global trade routes.according to the United Nations Conference on trade and progress (UNCTAD), global trade growth slowed to 1.7% in 2023, a stark contrast to the 3.8% recorded in 2022.

A Call for Regional Self-Reliance

Malaysia’s Deputy Minister of Investment, Trade and Industry, Liew Chin Tong, articulated a bold vision for Asean’s future.He stressed the need for the region to envision itself not merely as a manufacturer for the world, but as a ample consumer market in its own right within the next two decades. “I want Asean to take Asean very seriously,” Mr. Liew declared, emphasizing the importance of fostering belief in regional companies and its own people.

The ‘Race to the Bottom’

Mr.Liew cautioned that Asean’s historical success, driven by attracting investment through lowered wages and relaxed environmental standards, had devolved into a detrimental “race to the bottom.” he explained this model was predicated on the assumption of continued, unrestricted access to the United States market, an assumption increasingly challenged by recent policy shifts in Washington.

Forging a New Path Forward

To counter these challenges, Mr. Liew urged Asean governments to prioritize the development of regional multinational companies and to work collaboratively toward a unified industrial strategy. He envisioned the emergence of regional tech giants, drawing parallels to companies like Huawei, Samsung, and TSMC.

Teo siong Seng, Executive Chairman of Pacific International Lines and the singapore Business Federation, echoed this sentiment. He highlighted that asean’s potential remains hampered by internal fragmentation and uneven development across its 700 million inhabitants. “We all have a different dream,” Mr. Teo noted, referencing the diverse priorities among the founding members – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – as 1967.

Regional Cooperation as a Model

Mr. Teo pointed to the Johor-Singapore Special Economic Zone, established in January, as a positive example of closer regional collaboration. The zone, designed to streamline cross-border trade and investment, represents a step toward a more integrated Asean economy.

Addressing Economic Security Concerns

Dr. Yose Rizal Damuri, Executive Director of Indonesia’s Centre for Strategic and International Studies, underscored the importance of tackling social and economic inequality as a crucial step towards stability. He advocated for coordinated policies on economic security, including investment screening, access to critical resources, and technology transfer. Dr. Yose also suggested a unified response to China‘s industrial overcapacity, utilizing regional frameworks such as the Asean Single Window to maintain standards and sustainability.

Challenge	Proposed Solution
Declining export-Led Growth	Diversification into a meaningful consumer market
Internal Fragmentation	Closer regional cooperation (e.g., Johor-Singapore SEZ)
Economic Security Risks	Coordinated investment screening & resource management

Did you Know? Asean represents the fifth-largest economy in the world, with a combined GDP of over $3.6 trillion in 2023, according to the Asian Development Bank.

Pro Tip: Businesses seeking to engage with asean shoudl prioritize understanding the specific nuances and regulatory environments of each member state.

The leaders emphasized the need for proactive action, recognizing that delaying collective efforts could jeopardize long-term economic prospects despite domestic political challenges.

the Future of Asean: Long-term Considerations

The discussion at the Asia Future Summit highlights a pivotal moment for Asean. The region’s ability to adapt to evolving global dynamics will depend on its capacity to foster internal unity,promote sustainable development,and invest in its human capital.The demographic dividend Asean currently enjoys-a relatively young and growing population-is a critical asset that must be leveraged through education, skills development, and job creation.

Frequently Asked Questions About Asean’s Economic Future

• What is the biggest threat to Asean’s economic growth? The biggest threat is its continued reliance on an export-led model in the face of rising protectionism and shifting global trade patterns.
• What is the Johor-Singapore Special Economic Zone? It’s a collaborative project aimed at streamlining trade and investment between Singapore and Malaysia, serving as a potential model for greater asean cooperation.
• What role does China play in Asean’s economic future? China represents both a significant opportunity and a challenge, especially regarding industrial overcapacity and the need for a coordinated regional response.
• How important is regional unity for Asean’s success? Regional unity is crucial; fragmentation and differing priorities hinder Asean’s ability to act collectively on the global stage.
• What is meant by the “race to the bottom”? this refers to the practice of attracting investment by lowering wages and environmental standards, creating unsustainable and potentially harmful economic competition.
• What strategies is Asean considering to navigate the changing global landscape? Asean is exploring strategies such as developing regional multinational companies, fostering a unified industrial policy, and strengthening economic security measures.
• What demographic advantages does Asean possess? A relatively young and growing population, presenting opportunities for economic growth through workforce development and increased consumer spending.

What steps do you think Asean should prioritize to strengthen its economic independence? How can regional cooperation be improved to address shared challenges?

How does the implementation of RCEP contribute to ASEAN’s role in shaping the new world order?

The Shifting Global Landscape & ASEAN Centrality

Recent panel discussions at the East Asia Forum and the Shangri-La Dialog consistently highlight a pivotal shift in the global power dynamic. The conventional dominance of Western nations is being challenged by the rise of Asia, with the Association of Southeast Asian Nations (ASEAN) increasingly positioned as a key architect of the emerging “new world order.” This isn’t about replacing existing structures, but rather a recalibration – a multipolar world where regional organizations like ASEAN wield meaningful influence. Discussions center around ASEAN’s unique approach to diplomacy, its economic potential, and its strategic location. Key terms frequently used include geopolitical realignment, multipolarity, and regional integration.

Economic Powerhouse & Regional Trade Agreements

ASEAN’s economic growth is a cornerstone of its rising influence. Panelists at the ASEAN Business Forum emphasized the region’s potential as a global manufacturing hub and a burgeoning consumer market.

* RCEP (Regional Comprehensive Economic Partnership): The implementation of RCEP, a free trade agreement encompassing ASEAN members plus Australia, China, japan, New Zealand, and South Korea, is seen as a game-changer.It creates the world’s largest trading bloc, fostering greater economic interdependence and reducing trade barriers.

* Digital Economy: The rapid growth of the digital economy within ASEAN is another critical factor. Discussions at the Digital ASEAN Summit focused on the need for harmonized regulations and infrastructure development to unlock the full potential of e-commerce, fintech, and the digital services sector. digital transformation, e-commerce growth, and fintech innovation are key areas of focus.

* Investment Flows: Increased foreign direct investment (FDI) into ASEAN countries, particularly in sectors like renewable energy and sustainable infrastructure, demonstrates growing confidence in the region’s economic prospects.

Navigating Great Power Competition

ASEAN’s strategic location between China and the United States places it at the epicenter of great power competition. Panel discussions consistently address how ASEAN is navigating this complex geopolitical landscape.

* ASEAN Outlook on the Indo-Pacific (AOIP): The AOIP, adopted in 2019, outlines ASEAN’s vision for a cooperative and inclusive Indo-Pacific region. It emphasizes ASEAN centrality,dialogue,and adherence to international law. This is presented as an option to more assertive approaches.

* Maintaining Neutrality: A recurring theme is ASEAN’s commitment to neutrality and non-interference in the internal affairs of its member states. This principle, while sometimes criticized, is seen as crucial for maintaining regional stability and fostering consensus.

* Balancing Act: Experts at the IISS Asia Security Summit highlighted the delicate balancing act ASEAN performs in engaging with both China and the United States. Maintaining strong economic ties with China while seeking security partnerships with the US is a key challenge.Strategic autonomy, regional security, and great power dynamics are central to these conversations.

The South China Sea Dispute & Conflict Resolution

The South China Sea dispute remains a major flashpoint in the region. Panel discussions at the ASEAN regional Forum consistently address the need for peaceful resolution and adherence to the United Nations Convention on the Law of the Sea (UNCLOS).

* Code of Conduct (COC): Negotiations for a COC between ASEAN and China are ongoing, but progress has been slow. Panelists emphasize the importance of a legally binding and effective COC that can prevent escalation and promote maritime security.

* confidence-Building Measures: Strengthening confidence-building measures, such as joint military exercises and hotlines, is seen as a crucial step towards reducing tensions.

* International Law: Upholding international law and the principles of freedom of navigation are consistently emphasized as essential for maintaining stability in the South China Sea. Maritime security, international law, and conflict prevention are frequently discussed.

Challenges to ASEAN Unity & Cohesion

Despite its growing influence, ASEAN faces internal challenges that could hinder its ability to shape the new world order.

* Development Gaps: Significant economic disparities exist between ASEAN member states. Bridging these development gaps is crucial for ensuring equitable growth and preventing social unrest.

* Political Diversity: ASEAN’s diversity in political systems and ideologies can make it difficult to reach consensus on key issues.

* myanmar Crisis: The ongoing political crisis in Myanmar poses a significant challenge to ASEAN’s credibility and unity. The organization’s response to the crisis has been widely criticized as being too slow and ineffective. Regional cooperation, political stability, and human rights are key concerns.

Case Study: Indonesia’s 2023 ASEAN Chairmanship

Indonesia’s 2023 chairmanship of ASEAN provided a practical example of the organization’s evolving role. Indonesia prioritized strengthening ASEAN’s institutional capacity, promoting economic recovery, and addressing regional security challenges.Key initiatives included:

* Epicentrum of Growth: Positioning ASEAN as the “Epicentrum of Growth” – a region driving economic dynamism and innovation.

* Health Architecture: Strengthening ASEAN’s health architecture to better prepare for future pandemics.

* Digital Transformation: Accelerating digital transformation across the region.

This chairmanship demonstrated Indonesia’s commitment to proactive leadership and its vision for a more integrated and