Global trade tensions, policy uncertainty and subdued foreign direct investment pose a challenging economic environment for emerging markets as efforts to stimulate growth, create jobs and cut poverty are all held back.
- The Association of Southeast Asian Nations (ASEAN) must accelerate investment in digital infrastructure, advanced manufacturing and energy transition technologies.
- Countries such as Viet Nam, Thailand and Malaysia are shifting from traditional economic roles to higher-value industries.
- This article was first published in The Jakarta Post, read it here.
This has led to downgrades to growth forecasts across emerging economies – and the Association of Southeast Asian Nations (ASEAN) is no exception. Countries across the region, from Thailand and Vietnam to Indonesia to Malaysia, are feeling the pinch. In the face of these headwinds, ASEAN’s resilience depends on investing in innovation, digital transformation and advanced manufacturing, as well as deepening regional cooperation.
🌏 Economic Challenges
- ASEAN faces global trade tensions, policy uncertainty, and subdued foreign direct investment.
- Growth forecasts across emerging economies, including ASEAN, have been downgraded.
- Countries like Thailand, Viet Nam, Malaysia, and Indonesia are feeling the economic strain.
💡 Innovation & Technology
- ASEAN must invest in digital infrastructure, advanced manufacturing, and energy transition technologies to build resilience.
- The Digital Economy Framework Agreement (DEFA), expected in 2025, will harmonize digital trade rules and unlock ASEAN’s digital economy potential (projected to reach $2 trillion by 2030).
- Malaysia and Viet Nam have established Centres for the Fourth Industrial Revolution (C4IR)
Faced with this complex scenario, ASEAN economies must enhance their resilience. Central to this strategy is a unified commitment to investing in technology. Such efforts will significantly position the region to effectively navigate digital and energy transitions while bolstering advanced manufacturing capabilities.
Already, ASEAN has taken great strides to boost its technological capacity. Among the most significant is the ongoing negotiation of the game-changing Digital Economy Framework Agreement (DEFA). Planned to be concluded in 2025 under Malaysia’s ASEAN chairmanship, it will be a strategic roadmap for seizing opportunities offered by the digital transition.
📈 National Initiatives
- Viet Nam:
- Resolution 57 supports science, technology, and digital innovation.
- Resolution 68 promotes a globally competitive private sector with 20 large companies by 2030.
- Thailand: Transitioning from rice exports to agro-processing, aiming to move up the agriculture value chain and adopt sustainable practices.
- ASEAN overall: Seeks to climb the semiconductor value chain, moving beyond assembly/testing into higher-value production.
🤝 Regional Cooperation
- ASEAN’s strength lies in deeper collaboration: integrated markets, supply chain resilience, and digital integration.
- Adoption of ASEAN Community Vision 2045 emphasizes a “resilient, innovative, dynamic, people-centred ASEAN.”
- Singapore supports a rules-based trading system.
- The ASEAN Power Grid (APG) facilitates renewable energy trade, e.g., Laos exporting surplus green energy to Singapore.
- Indonesia’s role is critical, given its G20 membership and wealth of minerals like nickel (vital for batteries).
🌐 Global Engagement
Effective collaboration requires not just governments, but also private sector, civil society, and international organizations.
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