As ASEAN emerges from the Covid-19 pandemic, there is an opportunity for collaborative governance to boost the region’s capacity to meet future challenges in the economy, geopolitics, and the environment.
ASEAN’s High-Level Task Force (HLTF), an advisory body mandated to provide strategic guidance on ASEAN community building, has commenced its discussions on the region’s Vision for post-2025. In its inaugural meeting between 31 March-1 April 2022, Cambodia, as 2022 ASEAN chair, emphasised the need for HLTF members to understand ‘mega-trends and a rapidly changing geopolitical and economic landscape’.
ASEAN cooperation has always evolved in the context of global events. Its formation in 1967 was driven by the need to protect its member states’ (AMS) national interests against Cold War powers after decolonialisation. By the late 1980s, ASEAN had started to focus on economic cooperation, to reinforce regional peace with economic prosperity. The ASEAN Free Trade Area was established in 1992, while in 2003, ASEAN’s drive towards comprehensive cooperation was a response to remain competitive in face of stronger regionalism in Europe, China’s economic rise, and the consequent competition for FDI.
Now ASEAN cooperation is at a crossroads. While AMS continue to feel the ill effects of the COVID-19 pandemic, geopolitical tensions are heightening pressures on cooperation and climate change is becoming a systemic challenge. Policymakers should thus take into consideration three mega-trends – rising nationalism, worsening geopolitics and growing digitalisation – that will influence future ASEAN Community building.
The trend of rising nationalism resurfaced with the U.K.’s Brexit referendum and the U.S.’s decision to leave the Trans-Pacific Partnership, while the Covid-19 pandemic intensified such sentiments as vaccinating their own populations became a priority for many nation-states. More recently, several countries have implemented export controls of essential food supplies to mitigate inflationary and supply chain pressures in their domestic economies.
Calibrating the approach to accommodate national and global mega-trends, ASEAN member states (AMS) should take a thematic rather than sectoral approach to regional cooperation.
Geopolitical competition, driven by trade wars, technological rivalry and the Russia-Ukraine crisis, is on the rise, making the global economic outlook shaky. Simultaneously, alternative forms of global and regional cooperation, such as the Indo-Pacific Economic Framework (IPEF) and QUAD arrangements, are putting pressure on ASEAN’s ability to deliver a cohesive form of regional cooperation and complicating the region’s security architecture.
In part, the Covid-19 pandemic has accelerated the rapid adoption of digital solutions by many societies and industries. Services like education and healthcare largely moved online, working from home became the ‘new normal’ in 2020-21, and digital business models emerged to maintain firms’ operations. To varying degrees, regional governments embraced digital technology to manage the spread of disease infection. While these developments highlighted the inequities in societal digital access, they also offered significant upside potential.
That said, it is time for ASEAN policymakers to think of a new approach to community building. Calibrating the approach to accommodate national and global mega-trends, AMS should take a thematic rather than sectoral approach to regional cooperation. With rising nationalism, AMS should foster cooperation that is people-centric. Increasing regulatory coherence to harness the potential of digital transformation and to narrow societal inequalities are necessary to match demands for growing digitalisation. These challenges call for a new form of collaborative governance where multiple government agencies must work toward shared outcomes. While a fresh approach will signify ASEAN’s continued earnest effort towards community building, it will also maintain the organisation’s relevance in the face of potentially competing regional mechanisms such as the newly launched IPEF.
AMS should make regional cooperation relevant for their citizens by working towards narrowing the gaps in access to essential social services, such as education and healthcare. The pandemic has aggravated the education divide between students from high- and low-income households due to their unequal access to technology, leading to great learning losses and impacting the future earnings potential of the poor and vulnerable in all AMS. Similarly, ensuring food security for ASEAN’s poor in light of the worsening supply chain disruptions is crucial. AMS should prioritise trade facilitation and supply chain resilience to overcome their sourcing dependencies for intermediate and final products.
AMS can step up cooperation in digital transformation by strengthening digital connectivity, standardising regulations, and investing in training to boost people’s and firms’ productivity. Although online activities may decline as the pandemic recedes, certain sectors like hybrid work, e-commerce, e-health, e-payments and customs automation will be increasingly relevant. ASEAN, at the regional level, has so far embarked on digital cooperation in a piecemeal manner for trade facilitation, e-commerce and other areas, but it is yet to deliver on a single digital market. As digital transformation cuts across multiple sectors, a comprehensive approach on digital standards, data flow, cybersecurity and digital trade needs to be developed going forward. An expected study on the ASEAN Digital Economy Framework is a step in that direction.
Finally, ASEAN regional cooperation should strive to deliver on sustainability and the ‘green economy’ to address climate change risks. While a Circular Economy Framework and the ASEAN Taxonomy for Sustainable Finance are ongoing efforts, more is needed in terms of adaptation and mitigation, to support AMS’s commitments for the Paris Agreement and net-zero emission targets. An ASEAN Carbon Neutrality Roadmap, encouraging power sector decarbonisation, reducing coal utilisation, and enhancing renewables and low-carbon technology transfer, will be a useful tool.
The time is ripe for ASEAN policymakers to take a thematic approach to regional cooperation, prioritising the agendas of people-centricity, digital connectivity, and the green economy. Though this may need a new form of collaborative governance, AMS’s cross-sectoral management of the adverse impact of the Covid-19 pandemic has already pushed many governments in such a direction. ASEAN can build upon this to achieve coherent regional outcomes in the areas listed above. If successful, this new form of ASEAN cooperation post-2025 will not only increase economic resilience against future crises but will also send a strong message of continued ASEAN centrality.
Sanchita Basu Das is Associate Fellow at the Regional Economic Studies Programme, ISEAS - Yusof Ishak Institute.