ASEAN needs closer ties to face economic strains: Experts

As energy, trade and supply chains increasingly become tools of geopolitical competition, Southeast Asian countries have less room to hedge, experts say, adding that the challenge is to translate common principles into coordinated action and, ultimately, results.

The World Trade Organization said in a report last month that geopolitical tensions, government intervention, technological rivalry and supply chain concerns are putting greater pressure on rules-based trade.

The Association of Southeast Asian Nations published its Economic Community Strategic Plan 2026-2030 earlier this year, identifying geopolitical tensions, changing trade flows, technological transformation, climate change and demographic shifts as major forces shaping the region, while calling for deeper integration and greater resilience.

Narongchai Akrasanee, chairman of the Institute of Security and International Studies at Chulalongkorn University in Bangkok and a former Thai commerce minister, said the shift from globalization to global fragmentation posed both risks and opportunities.

Disruptions caused by United States trade policy shifts are pressuring markets, he said, but ASEAN's economic integration provides an important buffer.

Speaking at a recent seminar held by think tanks FACTS Asia and the Institute for Strategic Policy, Narongchai said intra-ASEAN trade has held at about one-fourth of the region's total trade and continued to grow despite external shocks.

However, resilience is not simply about trading more within the bloc, he said. It also requires letting market forces determine the allocation of scarce resources, particularly energy.

The challenge is substantial. The ASEAN Centre for Energy projects final energy consumption will reach 2.6 times its 2022 level by 2050 under its baseline scenario, while the bloc could become a net gas importer by next year.

Narongchai called for regulatory reforms covering oil and gas production, electricity generation and transmission, demand management, data centers and renewable energy, saying greater flexibility would help ASEAN meet rising energy needs while remaining competitive.

Shared risks

Benjarong Suwankiri, an adviser to Thailand's deputy prime minister and finance minister, emphasized the importance of a stable environment in which companies can keep investing despite geopolitical uncertainty.

ASEAN has "opportunities and also the responsibility to work together" to strengthen energy and food security, Benjarong said.

The region faces shared risks — from geopolitics and climate change to AI and demographic shifts — that cross borders and require concerted efforts, he said.

Regional cooperation could include advancing the ASEAN Power Grid, extending digital frameworks to AI governance, and developing common standards and markets for carbon credits, he added.

Kirida Bhaopichitr, vice-minister of commerce of Thailand, said ASEAN should not retreat from global markets but make itself a more reliable part of them.

"We must integrate not just for internal trade but to build a resilient, globally connected supply chain capable of withstanding disruptions," Kirida said.

ASEAN's market of more than 650 million people provides a strong foundation, she said, but the region must deepen both internal integration and links with external partners if it wants to remain a competitive hub for global trade and investment.

yangwanli@chinadaily.com.cn