Asean's window of opportunity in a fractured world

Ambitious as it may be, Asean members must not give up on striving to be a single market and production base.

- Ravi Velloor

Last week, at an opinion leaders' conference in Kuala Lumpur hosted by Malaysia's Ministry of Investment, Trade and Industry, I repeatedly heard the use of a once-familiar phrase that had somehow evaded Asean summit statements in recent years: the grouping's ambition to turn into "a single market and production base".

For the 10-member group, 2025 is a must-seize year if it is to fulfil its promise as the go-to region for investments in manufacturing and services, and a worthy trade and tourism partner.

It has a series of tailwinds at its back. The separation of supply chains driven by national security concerns, for example, has led global companies to seek out a neutral landing spot for the contesting sides to engage in commerce. Asean also has a broadly attractive demographic profile.

What is more - and not that Southeast Asians really relish it - the Chinese economy that so dominates the region is not in good shape, and geopolitical thermals have aligned in a bad way over it. In wider North-east Asia, all three significant economies - China, Japan and South Korea - have ageing societies that have slowed their growth, not to speak of the geopolitics that's driving a wedge in that once-swiftly integrating sub-region.

On the other side of Asean, India, the other developing Asian giant and a clear rival for foreign domestic investments, is in a deepening economic wheeze, causing near-term growth projections to be trimmed. The wider South Asian region around it is in worse shape. Sri Lanka and Bangladesh have barely stabilised after a spate of political turmoil, and the Pakistani nation state is undergoing a spell of economic and political malaise.