ASEAN poised for greater role in global economy

ASEAN could emerge as the world's fourth-largest economy in the coming decades but the regional bloc must accelerate integration, strengthen institutions, and adapt to global shifts to realize this potential, experts have said.

Mohd Munir Abdul Majid, chairman of CARI ASEAN Research and Advocacy, said ASEAN, with an economic size of $3.8 trillion, could become the fourth-largest economy, particularly AI in the services sector - will drive future growth.

ASEAN has progressed based on consensus to deepen integration and free trade, he noted.

The ASEAN Free Trade Area was formed in 1992, followed by the establishment of the ASEAN Economic Community (AEC). The most recent direction for this integration was provided in the Kuala Lumpur Declaration and ASEAN Community Vision 2045, adopted at the 46th ASEAN Summit in Kuala Lumpur in May.

Mohd Afzanizam Abdul Rashid, chief economist of Bank Muamalat Malaysia Berhad, said that e-commerce could be an important catalyst for intra-regional trade, and ASEAN needs to continue to invest in building a robust digital infrastructure.

He went on to say that payment systems such as QR code networks will be crucial to support micro, small and medium enterprises (MSMEs) in expanding to international markets.

Above all, ASEAN is a peaceful region, which makes it a conducive location for foreign direct investment and business ventures that can come from across the globe, Mohd Afzanizam stated, highlighting initiatives such as the Johor-Singapore Special Economic Zone as evidence of strengthening regional ties.

Li Yuqing, assistant professor at the Institute for International and Area Studies of Tsinghua University, said the updates to the ASEAN Trade in Goods Agreement enhance regional trade and deepen integration, supporting its goal of becoming the world's fourth-largest economy.

She also noted that integration makes ASEAN's investment environment more stable and transparent, enabling businesses to better access the ASEAN market and achieve more efficient resource allocation.

Oh Ei Sun, principal adviser at the Pacific Research Centre of Malaysia, stated that ASEAN should prioritize high-tech sectors that offer greater value-added potential. However, he also urged the bloc to address internal development disparities.

ASEAN should focus on eradicating poverty amongst itself for the least developed member states, and escaping the middle-income trap for the developing ones, he added.

He also suggested that ASEAN countries may deepen cooperation with China in infrastructure development, which would accelerate progress in the digital economy and green transition.