Harnessing Trade, Digital Innovation, and Connectivity for ASEAN's Growth

The Association of Southeast Asian Nations (ASEAN), in response to the evolving global economic dynamics, has the opportunity to strengthen economic stability and sustainable growth through a focus on trade, tourism, and digital advancement.

In today's competitive global marketplace, countries are reassessing their supply chains to reduce vulnerabilities and are adopting protectionist policies to support local industries. Moreover, issues like climate change and the race for advanced technologies such as AI and big data are increasingly considered from a national security perspective.

Within this context, the ASEAN community, consisting of 10 member states, must work together to ensure a prosperous economic future and to protect their national interests, with a particular focus on trade, digitalization, and connectivity.

Trade, particularly in services, is set to be a key driver for ASEAN economies, including sectors like finance, telecommunications, tourism, transportation, and professional services. These areas are essential for job creation and economic growth. After the pandemic, while trade in goods has decelerated, service trade has shown an upward trend, positioning ASEAN as a net exporter of services.

Tourism offers significant potential for ASEAN, showcasing the region's allure as a travel destination. To enhance competitiveness in tourism, ASEAN countries are expected to collaborate on infrastructure, skill development, marketing, and product innovation to increase intra-regional travel, which currently represents over 40% of ASEAN's international tourism, thus bolstering regional economic resilience.

The regional digital economy, encompassing e-commerce and digital health, is expected to grow from $300 billion to nearly $1 trillion by 2030. With effective policies on digital connectivity through regional cooperation, this growth could be doubled.

The Digital Economy Framework Agreement is crucial for this collaboration, covering areas such as digital standards, data flows, cybersecurity, digital trade, and the mobility of digital talent, among other components of digital public infrastructure.

Digital collaboration is also expected to bring additional benefits, including positive environmental effects, social cost savings of $12-30 billion, increased resilience, job creation, and improved access to education and healthcare.

Furthermore, both physical and institutional connectivity are vital for ASEAN's economic competitiveness, enhancing engagement with larger Asian and global economies. Sustainable infrastructure, including renewable energy, low-carbon transport, and urban energy efficiency, is gaining traction.

By integrating this with enhanced digital cooperation and streamlined cross-border logistics and supply chains, facilitating the movement of goods, services, and people across borders will protect the environment and strengthen regional resilience.

The collective approach to sustainable infrastructure is advantageous for ASEAN members committed to the Paris Agreement, with Nationally Determined Contributions aiming for net-zero CO2 emissions by 2050 and net-zero greenhouse gas emissions by 2065, to cap global temperature increases at 1.5°C.

It is a strategic moment for ASEAN policymakers to reconsider collaboration. Amidst global economic fragmentation, there are areas that require cross-border cooperation.

Economic self-reliance has increased in the region, and with pressing issues such as digitalization and climate change, mismanaged interdependence could lead to costs and economic challenges.

Therefore, for the upcoming term of ASEAN regional cooperation until 2045, member countries should regard their collective actions as a regional public good, where the benefits of enhanced trade, tourism, digitalization, and connectivity will result in sustainable and resilient outcomes for the region's population.