For more than a decade, a cornerstone of the Association of Southeast Asian Nations’ (ASEAN) policy has been an incremental push to establish the ASEAN Community. Based on three interconnected pillars - political-security, economic, and people-to-people - the ASEAN Community is meant to usher in a new phase of regional integration and connectivity in Southeast Asia. 

That process was severely impacted by the COVID-19 pandemic as national borders closed and governments looked inward. ASEAN now has to confront the reality of transitioning to a post-COVID environment amid heightened geopolitical tensions, supply chain disruptions, food and energy security concerns, and mounting economic headwinds. 

What is the current state and future trajectory of regional integration and connectivity in ASEAN? What can ASEAN leaders, civil society, and the private sector do to support the development of an ASEAN Community?

Vannarith Chheang, President, Asia Vision Institute

As the chair of ASEAN in 2022, Cambodia has set the tone on the spirit of “togetherness” and put forward initiatives to further strengthen ASEAN’s competitiveness and resilience. This includes the proposal to establish the ASEAN Green Deal which aims to promote knowledge sharing as well as develop integrated solutions for the transformation to a green economy. It is also targeted at generating new industries and opportunities from technological innovation and improved productivity. Additionally, the deal will seek to harness investment opportunities in green infrastructure through public-private partnerships; accelerate and consolidate sustainable production and consumption; and foster low-carbon, resource-efficient, and socially-inclusive development.

As ASEAN transitions into the post-COVID-19 era, some specific measures, including the ASEAN Comprehensive Recovery Framework (ACRF), have been adopted to promote inclusivity, sustainability, and resilience. A sustainable ASEAN requires coordinated regional efforts in promoting climate resilience, clean and renewable energy, green investment, and fair financing.

An inclusive ASEAN demands member states work closely together to ensure that no one is left behind in the regional integration and connectivity process. Digital and financial inclusion, social protection, gender equality, and people-centered development are critical measures to achieving an inclusive recovery.

Amidst rising international uncertainties and multiple complex crises, ASEAN needs to continuously build its institutional capacity in response to future challenges. A resilient ASEAN refers to the readiness of the organization to face shocks and hazards. Therefore, ASEAN needs to invest more resources and double down on its efforts in building a future-ready and crisis-responsive organization.

Moving forward, strengthening ASEAN centrality remains a core task. In addition to its traditional convening and agenda-setting power, ASEAN needs to be able to shape and deliver outcomes to prove its relevance. The policy measures that have been adopted need to be effectively implemented. For this to happen, leadership and institutional capacity are required. ASEAN needs to strengthen decision-making to respond to emerging issues and challenges.

Despite ASEAN’s economic achievements and progress, the grouping needs to enhance its competitiveness amidst global headwinds, chiefly arising from sharpening geopolitical competition, economic fragmentation, and climate crises. ASEAN must not be complacent about geopolitical forces that can disrupt peace, stability, and prosperity in the region. Therefore, the organization needs to continuously reform to adapt to geopolitical changes through the promotion of open and inclusive multilateralism set against the context of a rules-based international order.

Dr. Jasmine Begum, Director of Legal, Corporate & Government Affairs, Microsoft ASEAN and New Markets

The pandemic accelerated technology adoption and saw close collaboration between the private and public sectors. This has also paved the way for deeper private sector involvement in efforts to build economic resilience and address socio-economic challenges. Over and above traditional infrastructure investment and economic activity that create stimulus for national economies, private sector efforts can facilitate the creation of the right ecosystem for an economy to thrive - further supporting ASEAN’s vision for connectivity and integration.

Micro, small, and medium enterprises (MSMEs) account for up to 99% of businesses, contribute to more than 50% of ASEAN’s gross domestic product, and employ more than 80% of the workforce in the region. Nevertheless, MSMEs are among the most vulnerable to economic shocks. Small businesses, including those run by women and young entrepreneurs, have been hit hardest by the pandemic, compelling us to rethink what it means to hit refresh for MSMEs in a post-COVID world.

Physical and digital infrastructure limitations often prevent MSMEs from operating efficiently or accessing international markets at competitive costs, exacerbating economic insecurity or reduced growth. In addressing multilateralism, we must develop MSMEs that are digital by design, equipped to serve beyond their markets, and to reach regional and global audiences.

Technology companies are working with governments in further empowering MSMEs to adopt digital technologies meaningfully. Indonesia has led the way with its transformative digitalization of microenterprises and warungs – converting digital divides into digital dividends. For example, Microsoft’s partnership with Bukalapak, an Indonesian e-commerce company, enables over 12 million MSMEs to reach more than 100 million customers.

As economies recover, jobs are also evolving, and we need to equip the region with the right digital skills. This will require new multistakeholder partnerships, between tech companies, employers, non-profit organizations, academia, think tanks, and government agencies. In Malaysia, Microsoft has equipped more than 600,000 Malaysians with digital skills, as part of its Bersama Malaysia commitment to skill 1 million Malaysians by 2023. In Thailand, as part of Accelerating Thailand, we partnered with the government to digitally upskill more than 280,000 Thais in its first phase. Through the Berdayakan Indonesia initiative, we have also skilled 21 million Indonesians. Region-wide, we partner with the ASEAN Foundation to offer cybersecurity skilling and have rolled out Code; Without Barriers to bridge the gender gap in the fast-growing cloud and AI workforce by providing skills training and technical certifications to women.

Economic resilience in the digital age necessitates a focus on cybersecurity. The past two years have witnessed not just the growth of cybercrime, but a proliferation in cyberattacks; both for financial gain and nation-state attacks, too. At the core of economic resilience and technology adoption is the trust that people have in the technology they use. The role of the private sector, as owners and operators of much of world’s digital infrastructure, is vital in helping create a secure and trusted digital environment. Microsoft is contributing to national cybersecurity efforts across the region, through the Cyber Threat Intelligence Programme (CTIP) with telcos, CERTS and key government agencies across ASEAN.

We want to be part of not just the conversation, but of this cause, using technology and skills to democratize economic resilience and opportunity for all of us in ASEAN, and across the world.

Eduardo Pedrosa, Secretary General, Pacific Economic Cooperation Council.

As Southeast Asia exits from the pandemic and removes the unprecedented measures taken to contain the spread of the virus, the time is right to consider the impact of COVID-19 and its implications for the ASEAN Economic Community (AEC). In November 2020, leaders adopted the ASEAN Comprehensive Recovery Framework (ACRF), comprising five broad areas covering health; human security; integration; the digital economy; and sustainability. The ACRF framework consolidates much of ASEAN’s ongoing work.

The region is facing serious headwinds. The Pacific Economic Cooperation Council’s (PECC’s) survey on the State of the Region found that for Southeast Asia respondents the top risks to growth were a fragmented global economy, increased protectionism, and trade wars. Despite these challenges, both the AEC and ACRF are well-positioned to help address these issues but still have a long way to go. Illustrative of the inflationary pressures confronting member states and how far the region is from achieving single market status are the headline price differentials. The price of a kilogram of rice – a staple diet – varies within ASEAN from USD 65 cents to USD 1.14 due to variances in logistics or policies.

One issue that the pandemic has spotlighted is global value chain resilience. Once limited to operations managers, this is now a central topic in earnings calls making the headlines, and its urgency is recognized in the ACRF’s call to enhance supply chain resilience under Broad Strategy Three: Maximizing the Potential of [the] Intra-ASEAN Market Place and Broader Economic Integration. According to PECC’s survey, the biggest contributing factors to global supply chain disruptions are limitations on the supply side and limited logistics capacity.

Addressing those logistics issues is key to increased competitiveness and more inclusive trade, and that is where ASEAN’s Masterplan on ASEAN Connectivity (MPAC) plays a critical role in providing a roadmap for enhancing regional and inter-regional trade. The fact that 74 percent of Southeast Asian respondents to PECC’s survey thought that the AEC would have a positive impact on their economies highlights the importance regional respondents see in integrating with the global economy. Relatedly, 75 percent believed that the Regional Comprehensive Economic Partnership (RCEP) would be similarly beneficial, perhaps reflecting the shape of value chains in the region. Implementation of RCEP of course depends on all members to ratify the agreement and establish the RCEP Secretariat.

With digital transformation accelerated by the pandemic, ASEAN members would be well-served to speedily ensure the development of a coherent and interoperable regulatory framework for the digital economy. This is critical not only for a more inclusive digital economy but also for improving supply chain performance and resilience. While ASEAN has adopted a Digital Masterplan, the negotiations for the announced Digital Economy Framework Agreement are still three years away. The pandemic and ongoing geopolitical challenges should motivate ASEAN members to double-down on integration efforts. However, despite all of the plans and frameworks, it remains difficult for regional governments to communicate this priority and engender support from the society.

In short, ASEAN member states face a challenging future, especially in this inflationary period. Despite the hurdles surrounding implementation and difficulties raising awareness, deepening regional integration through the AEC and enhancing engagements with outside markets should remain a top priority for regional governments. The transition to a post-COVID environment also provides an opportunity for regional policymakers to identify and re-examine priorities and advance new solutions.

Moe Thuzar, Fellow and acting coordinator, ISEAS-Yusof Ishak Institute’s Myanmar Studies Programme, and former lead researcher at ISEAS’s ASEAN Studies Centre.

The Myanmar crisis overshadowed several notable outcomes at the annual summits of ASEAN leaders and their Dialogue Partner counterparts this year. These included agreement on Timor-Leste’s admission to ASEAN, and the elevation of the United States and India to comprehensive strategic partners.

The ASEAN leaders also held their annual interface meetings with business leaders, parliamentarians, and youth, as part of their institutional process for community-building. These meetings are meant to inject inputs and perspectives from different sectors of society on the impact of regional decisions on the lives of peoples and communities. While the annual ASEAN Civil Society Conference/ASEAN People’s Forum continues to be held and to issue publicly-issued recommendations prior to ASEAN Summits, the ASEAN leaders’ interface with representatives of civil society organizations has dropped off the agenda. Its convening is subject to the ASEAN Chair’s discretion.

The ASEAN Leaders’ Statement on ASEAN’s 55th Anniversary, intended as a commemorative recap of the Association’s work on peace and prosperity for its peoples as well as its commitments to ASEAN community-building, makes eight mentions of ‘challenges,’ a count more than its mention of ‘peoples.’ At 55, the many expectations of what ASEAN should achieve, and frustrations over its limitations, indicate that ASEAN’s continued relevance in the eyes of its constituents is at an important juncture. Though still retaining relevance in its security and economic engagements with external partners, ASEAN’s engagement with its own peoples is a point of concern.

Civil society input to the ASEAN decision-making process will need to be sought and submitted in a manner similar to research or think-tank inputs to decision-makers. There are several discrete efforts at functional levels; these should be viewed as confidence-building exercises which are as necessary in the people sector as in the realms of politics or trade.

Ultimately, however, community-building is about ASEAN peoples engaging with, reaching out to, and assisting each other. While people-to-people links cannot be fully orchestrated, the youth and education exchanges under various ASEAN programmes, and community dialogues facilitated by the ASEAN Secretariat have helped build connections for the future. Such exchanges can become venues to debate and discuss people’s concerns and to candidly examine what ASEAN can or cannot do at and for national-level needs and change. ASEAN sectoral cooperation in youth, women, health (particularly HIV/AIDS), social safety, and disaster response has involved civil society input to regional initiatives. An illustrative example is the ASEAN Youth Volunteer Programme which grew out of a youth initiative to assist cyclone recovery efforts in Myanmar after the 2008 Cyclone Nargis disaster.

The current Myanmar crisis presents ASEAN with both an opportunity to mobilize people-to-people connections to provide humanitarian assistance. Unfortunately, one has yet to materialize. Beyond the actual physical difficulties accessing communities in need, regional governments prioritizing concerns related to pandemic recovery and expectations that ASEAN’s intergovernmental process would achieve a breakthrough continues to constrain the response to the needs of the Myanmar people. Member states need to provide support that will enable civil society groups to overcome the range of obstacles to providing on-the-ground support.