GENEVA – In the more than half a century since its inception, Asean has historically been a relatively ‘quiet’ trading bloc. However, signs point to that changing.
Rarely was there a month during 2022 when Asean was not in the news, and it was a year in which it hosted not one but three global leadership summits – the Asean/East Asia Summit in Phnom Penh, the G20 Summit in Bali and Apec Economic leaders meeting in Bangkok.
Growth – use existing and new advantages
Economically, Asean is one of the few bright spots as the global economy continues.
Its economies have enjoyed strong growth during 2022 on the back of a post-Covid-19 surge in activity, and although this will slow and the global chill will have some effect, overall growth forecasts for 2023 are at 4.4 percent for the ‘Asean stuck. 6 (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam).
Together, Asean is a large bloc in terms of physical land mass, natural resources and population size (about 680 million). Its young population is increasingly educated and affluent, and with an entrepreneurial spirit and growing resources to invest in business, they are creating a strong regional market that will help offset the dampening of the global slowdown.
Tourism is another boon, and as international travel recovers during 2023, the region – and especially its perennially popular destinations such as Thailand – should enjoy further growth in arrivals.
As a trading bloc, Asean is one of the fastest growing (accounting for around 8 percent of global exports), and thanks to years of making trade deals, now sits at the heart of two major free trade areas (FTA). These are the Regional Comprehensive Economic Partnership (RCEP), which includes Australia, China, Japan, New Zealand and South Korea, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Latin American countries such as Chile and Mexico, as well as Canada and several other Asian nations.
Sustainability – from laggard to leader
One of the biggest challenges facing the region is climate change. For Indonesia and the Philippines, with their large archipelagos and many islanders, the prospect of sea level rise is devastating.
Already some of the Asean member states are suffering other climatic changes, typically in the form of unhealthy heavy rains that cause flooding, and this situation can only get worse.
One of the worst affected is Indonesia and its decision to take the lead of the Ocean 20 initiative underlines the rising level of engagement – and voice – that Asean countries want to have in the sustainability debate.
In 2021, the bloc launched its first State of Climate Change Report, which not only characterizes the changing perspectives, but is designed to find ways in which the 10 members can collaborate to achieve the climate goals.
How to tackle its growing greenhouse gas emissions remains a central issue, but positively, nine member states have committed to net zero and the bloc has pledged to make 23 percent of its primary energy renewable by 2025, with global solar power, Viet Nam leading the way in this respect .