Experts call for ASEAN unity amid global economic pressures

 

Leading economic experts from across Southeast Asia emphasised the critical need for regional solidarity and strategic collaboration in navigating complex global challenges, as they gathered for the 47th annual conference of the Federation of ASEAN Economic Associations' on Wednesday.

 

They agreed not to let ASEAN become a "playing card" for major powers. 

 

Hosted by the Economic Society of Thailand in Bangkok, the conference addressed pivotal issues, including geopolitical conflicts, climate change, digital technology, and demographic shifts, which are reshaping the ASEAN economic landscape.

 

Speaking at the conference, Narongchai Akasenee, a prominent economist, warned that ASEAN is at a crossroads, emerging from a “perfect spring” to face a “perfect storm” of challenges. These include the reconfiguration of foreign trade and investment in the face of geopolitical tensions, delivering on climate change pledges, addressing demographic imbalances, and harnessing digital technology for economic growth.

 

 

"ASEAN has exited its 'perfect spring' period and is entering the 'perfect storm' where various challenges and issues are confronting the region," Akasenee said. "Managing supply and demand at the regional scale can help the trade-off between low-cost fossil fuel energy and higher-cost renewables. Cooperation on migrant workers would help manage the imbalances."

 

Experts from Indonesia, Vietnam, and Thailand stressed the importance of viewing ASEAN as a unified region, prioritising regional and national interests, and enhancing collaboration to mitigate external pressures.

 

 

"We should not allow ASEAN to become a 'playing card' for superpowers," Muhammad Edhie Purnawan, a representative from  the Indonesian Economic Scholars Association, warned. "We need to work together to strengthen our position against larger powers and navigate the complexities of sustainable transformation amidst various challenges."

 

Prof Bui Quang Tuan, vice president of the Vietnam Economic Association, echoed these sentiments by emphasising the need for ASEAN to focus on sustainable economic transformation. 

 

 

"Sustainable economic transformation is a primary agenda for ASEAN, which includes addressing significant challenges to achieve inclusive and sustainable growth," Tuan said. He noted that investment in science and technology is critical, as Vietnam currently spends only about 0.8% of its GDP in these areas, limiting its potential to leverage technology for economic growth.

 

 

          Key challenges

The economists highlighted several critical challenges facing the region:

• Geopolitical tensions: Experts warned against allowing major powers to manipulate ASEAN nations, stressing the importance of maintaining regional unity.

 

• Climate change commitments: Implementing pledges from international climate conferences, such as COP28 in Dubai, remains challenging due to the economic trade-offs between fossil fuels and renewable energy.

 

• Demographic shifts: Varying population growth and ageing structures across ASEAN countries are creating significant labour market imbalances.

 

• Technological transformation: The rapid advancement of artificial intelligence and digital technologies demands robust governance frameworks.

 

 

          Economic potential

Dr Kiatipong Ariyapruchya, senior country economist at the World Bank, highlighted ASEAN's growth potential, demographic advantage, and natural resources. He cautioned that the region needed to shift from traditional growth models to ones focused on innovation and productivity.

 

 

"ASEAN's growth has been largely driven by domestic demand and foreign investment. We need to shift to a growth model that is driven by innovation and productivity," he said. 

 

Economists predict ASEAN could become the fourth-largest global economy by 2030.

 

 

 

          Call for collaborative action

Narongchai emphasised the need for strategic adaptation. The region is preparing to formally adopt ASEAN Vision 2040 in 2025, with research and institutional collaboration seen as crucial to implementation.

 

Indonesia aims to achieve 8% economic growth rate by 2029, while Vietnam is focusing on increasing its digital economy's contribution to GDP and investing in technological innovation.

 

 

Kobsak Pootrakool, president of the Thai Economic Association, stressed the paramount importance of service sector integration and strategic decision-making in the face of technological disruption.

 

"We must prioritise regional interests and collaborate effectively to navigate these challenges," he said, emphasising that unity is the region's strongest asset in an increasingly complex global economic environment.