Securing the ASEAN Economy in an Over-securitised World

ASEAN is confronting a new fact of life: an over-securitised world. Within a short period of time, the global arena has turned into a battleground where major powers flex their muscles and weaponise economic interdependence to achieve security and other non-economic objectives. Such deployments of economic statecraft for geopolitical goals, which in the past were largely confined to conventional and cold wars, now make regular headlines. Unlike ordinary economic policy, economic statecraft is driven by the strategic intent to influence, defines clear target actors if not adversary, and treats the economy as an instrument of broader foreign policy.

ASEAN cannot afford to let the region to become the economic battleground of major powers. It must carefully manage these geoeconomic challenges without being entrapped into contributing to the spiral of over-securitisation.

In the age of geopolitical competition, greater consideration of security concerns is understandable. ASEAN member states’ concerns are shaped by lingering contestations over Southeast Asia’s lands and waters or unresolved suspicions among neighbours. These potential flashpoints raise concerns that adversarial parties may resort to economic statecraft, including the prohibition or restrictions on the flows of goods, services, or people from each other. In the South China Sea, economic statecraft is even more complex due to disparities in market power alongside intertwined supply chains, and more far-reaching due to the indispensability of its shipping lanes to global trade.

For major powers, security concerns generally revolve around sustaining agency and competing for strategic leadership. Overdependence on others — especially geopolitical rivals — for raw materials, cutting-edge technologies, or critical infrastructure is perceived as an imminent threat. Other countries also have concerns over overdependence but must balance this against being co-opted by any major power for their own security agenda.

Economic statecraft has become multi-dimensional, not only through trade and investment but also data and technology, financial and payment systems. Increasingly, major powers may pressure other countries participating in the supply chains of geostrategic competitors, including by limiting the rival economies’ access to its critical technologies or materials. The US’ use of foreign direct product rules along the supply chains to limit China’s access to its technologies receives a reciprocal response by China via restrictions on its rare earth and related technologies. Other economies needing these critical materials and technologies may be inadvertently caught in a predicament.

This is alarming for ASEAN, yet it must resist the temptation to allow securitisation agendas to prevail over the economy. Without clear parameters, whether internationally acceptable standards, transparency, appeal, and review requirements, security considerations are bound to be misused. Without multilateral oversight, power can be applied ambiguously, for instance, through unilateral invocation of ‘national-security’ tariffs, expansion of foreign-investment screening regimes, creation of subjective unreliable-entity lists, and imposition of discretionary duties. The major powers’ escalation of such measures will undermine the longstanding benefits of international cooperation, erode interoperability, and disproportionately hurt emerging economies — outcomes that are an affront to ASEAN’s spirit of open and inclusive regionalism.

ASEAN’s Advantages and Disadvantages in Navigating Economic Security Nexus

Collectively, ASEAN’s growing economy offers a buffer to external shocks. ASEAN’s long standing non-aligned and inclusive stance also positions the region as a safe alternative for global industries and countries seeking to diversify their supply chains. Moreover, ASEAN has frameworks and platforms that can be used to convene other partners without having to choose sides or being perceived as choosing a side, and to forge convergence in areas where the weakened multilateralism fails to deliver.

However, with advantages come disadvantages. ASEAN’s diversity of economic capacities and geopolitical distance from major powers, coupled with its consensus-based decision-making, often leads to modest common denominators lacking force. Institutionally, ASEAN’s pillar-based approach separates deliberation and decision-making on political security from economic cooperation; this works against effective and coordinated responses to the growing economic security nexus. ASEAN has, in some ways, become a victim of its own success in formalising the three Community pillars.

In the absence of a shared strategy to deal with the situation, ASEAN and individual member states are at risk of being co-opted by external parties in their own security agenda. Several ASEAN member states are negotiating bilateral arrangements with major partners. Agreements tilt too far, such as through overly restrictive or discriminatory rules of origin or geopolitically-driven economic security perspectives, risk setting an unhelpful precedent, eroding ASEAN’s credibility, and weakening ASEAN centrality and ASEAN-centred processes.

Closer coordination is imperative, particularly among ASEAN’s larger economies, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines, to share perspectives and build common ground. Such exchanges, whether formal or informal, would help strengthen ASEAN’s collective position and ensure that national approaches and regional priorities are mutually reinforcing. ASEAN should also coordinate in managing the risks of major powers’ weaponisation of the global and regional economy, with each other and with like-minded partners, through standards and rules-setting, information sharing, and risk monitoring.

Effective coordination requires leadership. The region needs a clearer vision of how to balance economic resilience with openness and how to position itself amid shifting global supply chains. ASEAN’s advantage lies in its convening power — the ability to frame discussions, shape norms, and broker cooperation among partners who may not otherwise engage. Harnessing this will determine whether ASEAN remains a rule-maker or becomes a rule-taker in the emerging economic order.

Pathways for ASEAN Action

The foremost priority for ASEAN is to agree on the steps towards strategic coordination to manage economic security linkages. ASEAN already has the mandate to address regional security comprehensively; both internally as stipulated in the ASEAN Charter, and externally in its relations with partners as envisioned in the Treaty of Amity and Cooperation in Southeast Asia.

Various mechanisms are readily available. The long-standing ASEAN Coordinating Council is tasked, among others, to deliberate on cross-pillar issues, while the 2019 ASEAN Outlook on the Indo-Pacific aims to maintain ASEAN’s centrality and spirit of openness, inclusion, and cooperation in the contested region. The ASEAN Geoeconomics Task Force (AGTF) was recently established to discuss ASEAN strategy to respond to global trade uncertainties and strengthen economic resilience. The challenge is to effectively utilise and implement these mechanisms, and to avert siloed discussions and decision-making, especially on cross-pillar issues.

In terms of concrete actions, ASEAN should strengthen cooperation on critical supply chains that are vulnerable to geopolitical disruptions, particularly in critical materials and technologies, or vital sectors that must be safeguarded against crises, such as in food, energy, and healthcare. Cooperation should focus on boosting regional connectivity and capacity, monitoring potential risks and chokepoints, and ensuring that engagement with partners — bilaterally or regionally — is aligned with the region’s own vision on resilient supply chain.

ASEAN should agree on its own narrative on how the region sees and addresses geopolitical and geoeconomic concerns based on its own considerations rather than being driven by any competing power. ASEAN should consistently emphasise the value and openness of its frameworks and mechanisms, its capacity to convene dialogues, and its unrelenting commitment to rules-based multilateralism.

Finally, ASEAN needs to mainstream geoeconomic considerations in its cooperation agenda. The AGTF is a start and has been instrumental in highlighting priorities for ASEAN coordination on geoeconomic issues. However, discussion on geoeconomics should be a matter of cross-pillar consideration within the ASEAN institutions, incorporating both economic and security perspectives and enabling holistic responses. A high-level platform that can provide swift recommendations to ASEAN leadership on these matters will be ideal, complemented by inputs from inter-disciplinary experts and practitioners, with cross-pillar support from the ASEAN Secretariat.

ASEAN needs to secure its economy on its own terms, resisting externally driven efforts to over-securitise economic affairs. ASEAN has strategic space to act, and the joint ASEAN Foreign and Economic Ministers’ meeting planned ahead of the 47th ASEAN Summit is an opportune occasion.

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Editor’s Note:
ASEANFocus+ articles are timely critical insight pieces published by the ASEAN Studies Centre.