BGA Adviser Dr. Prashanth Parameswaran wrote an update to clients on geopolitical tensions in the ASEAN Summit.

Context

  • The outcomes of the latest round of Association of Southeast Asian Nations (ASEAN) summitry October 8-11 point to attempts at making regional inroads in key sectors amid heightened geopolitical competition. ASEAN leaders took stock of some critical areas where Southeast Asia’s growth story will be written amid intensifying major power rivalry, including developing a framework for undersea cables, charting out a new infrastructure masterplan and finalizing what could be the world’s first regional digital economy framework agreement.
  • Regional efforts championed by select countries in key sectors could have important implications for companies and other stakeholders even as geoeconomic and geopolitical risks remain on the horizon in cases like Myanmar and the South China Sea. Malaysia’s chairmanship of ASEAN in 2025 will also come as the grouping charts out the next phase of its community-building out to 2045, by which time it is projected to be the world’s fourth largest economy even amid concerns in parts of the region about its long-held centrality within the evolving Indo-Pacific architecture.

Significance

  • Key major powers touted regional sectoral inroads made in Southeast Asia. The United States announced a new, long-mulled U.S.-ASEAN maritime exercise for 2025, while China declared substantive completion of efforts to upgrade the ASEAN-China free trade pact. Japan finalized an action plan for its Asia Zero Emissions Community, which included support from Australia and attempted to meet outstanding requests from Southeast Asian states for tangible projects in areas like renewables and energy trade. South Korea said it would scale up development funds by 2027 as it joined ASEAN’s highest tier of comprehensive strategic partnerships. The current list of six comprehensive strategic partnerships also includes Australia, China, India, Japan and the United States.
  • ASEAN finalized efforts to launch its next phase of community-building in 2025, which will extend this process out to 2045. BGA understands from ASEAN officials that much of the work has already been completed to tee this up for a launch by Malaysia during its ASEAN chairmanship next year. ASEAN Vision 2045 is set to include sections on ASEAN’s three pillars — political-security, economic and sociocultural — alongside cross-pillar and connectivity issues. This comes at a time where flashpoint management is important for ASEAN as tensions in the South China Sea increase.

Implications

  • Looking ahead, interested companies should closely monitor consequential regional sectoral inroads. Of particular note on the digital side will be the status of the Digital Economy Framework Agreement — which, if realized, would be the world’s first major regionwide digital economy agreement. BGA understands that progress has slowed relative to earlier expectations, and differences remain around how to address issues like data flows. ASEAN had set a timeline to finalize a digital agreement by the end of 2025. On infrastructure, ASEAN is working through a years-along effort to finalize a successor plan to its earlier Master Plan on ASEAN Connectivity 2025. The development of the ASEAN Connectivity Strategic Plan will signal where the grouping’s priorities lie in an area where unmet needs continue to be significant.
  • Adopted ASEAN outcome documents highlighted major regional economic focus areas. ASEAN leaders adopted a declaration on enhancing supply chain connectivity and completed a review of a pact on intellectual property. They also acknowledged ongoing ministerial work, including the launch of an ASEAN minerals exploration strategy and progress on a cross-sectoral blue economy implementation plan. At the same time, leaders also acknowledged sectoral priorities where challenges remain. For example, on energy, the chairman’s statement released at the summit candidly noted “the need to make significant progress” in realizing the challenging idea of interconnected, cross-border decarbonization approach via the ASEAN Power Grid.

We will continue to keep you updated on developments in the Indo-Pacific as they occur. If you have any comments or questions, please contact BGA Adviser Dr. Prashanth Parameswaran at prashanth@bowergroupasia.com.

Best regards,

BowerGroupAsia

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Advisor

Prashanth is a recognized scholar, commentator and expert on geopolitical and geoeconomic developments across Asia. He has spent nearly two decades analyzing the region, with a focus on Asia’s politics and security, U.S. foreign policy and Southeast Asia.   Prashanth is concurrently a fellow at the Wilson Center, a senior columnist at The Diplomat magazine and an instructor for institutions including the U.S. State Department. He is the founder of the twice-weekly ASEAN Wonk newsletter, which offers research insights and analysis on the geopolitics and geoeconomics of Southeast Asia and the Indo-Pacific region.  Prashanth has held various roles across think ... Read More