ASEAN - a "bright spot" in the world in 2023

From an area previously considered a global backwater, the ASEAN bloc of 10 Southeast Asian states has risen dramatically in recent years to become one of the world's most significant regions. ASEAN has overtaken China as the world's fifth-largest economy, with a combined GDP of 3.35 trillion USD and an external trade value of 645.2 billion USD.

According to international organizations, the ASEAN region's GDP growth will be about 5% in 2023. In the context of the global economy, this statistic is encouraging, especially given that some big nations are suffering recession.

Notably, ASEAN is taking on a more crucial position in global commerce. It is located at the confluence of the East Sea and the Malacca Strait, both of which are vital arteries for worldwide marine transit. Around 90,000 boats pass through the Malacca Strait each year, accounting for around 40% of the world's seaborne trade.

Experts credit the ASEAN nations' bright prospects to their suitable approach in several sectors ranging from the economics to politics and diplomacy.

ASEAN maintains an open economy and has made substantial commitments to regional and global economic cooperation. According to analysts, in a period of increased global protectionism to deal with crises, this alternative approach allows the area to successfully use its economic advantages.

Vietnam serves as a great example. Vietnam established a trade surplus of 12.25 billion USD in the first six months of 2023, an optimistic statistic in the face of a severe fall in global commodity demand owing to inflation and the Russia-Ukraine war.

Furthermore, the Vietnamese government has responded to the global monetary tightening trend with flexible monetary policies. While the Federal Reserve in the United States is heading in the other direction, the State Bank of Vietnam has lowered policy rates four times in a row to help the economy. Domestic capital flows have been facilitated as a result of this counter-trend, allowing enterprises to obtain resources for sustaining and growing output.

Along with Vietnam, nations in the area such as the Philippines, Indonesia, and Malaysia have excellent economic prospects despite the year's problems. The World Bank anticipated GDP growth rates of 6% for the Philippines, 4.9% for Indonesia, and 4.3% for Malaysia in June 2023, all of which were higher than the world average.

"The ASEAN job market remains optimistic, bolstering domestic consumption within the bloc." Furthermore, the recovery of tourism will help ASEAN gain stable foreign currency," said Edward Lee, Standard Chartered Bank's Chief Economist for ASEAN and South Asia.

Another reason for ASEAN's success is its right foreign policy strategy. ASEAN has historically maintained a relatively neutral posture as a group of developing countries in a sensitive and crucial geopolitical region, allowing them to avoid being engaged in political rivalry between the United States and China.

ASEAN continues to work closely with both the United States and China to promote regional peace, stability, and cooperation. Nonetheless, the member nations remain prepared to take firm stances on matters concerning regional peace, sovereignty, stability, and development based on principles and international conventions.

Dr. Ilango Karuppannan, a former Malaysian ambassador and specialist in international relations, feels that ASEAN, as a regional organization, plays a unique role in bringing the United States and China closer together. If successful, this would be a watershed moment in establishing the EU's new attitude, similar to Canada's Ottawa Treaty on landmines or Japan's Kyoto Protocol on climate change.

Of course, this will not be simple. ASEAN must overcome a number of impediments to unity and coherent action. However, given its expanding status, ASEAN has every right to expect to be counted among the world's most powerful organizations.