AEC achievement should spur Asean to greater integration

New Straits Times

27-05-2025

As Malaysia hosts the 46th Asean Summit, a significant milestone has been announced: the Asean Economic Community (AEC) Blueprint 2025 has reached 97 per cent implementation rate.
This marks a critical juncture to reflect, recalibrate and reimagine Asean's economic trajectory in a far more complex global environment. Formally launched in 2015, the AEC represents Asean's most ambitious push towards regional integration.
Grounded in five interconnected pillars—economic cohesion, competitiveness and innovation, sectoral cooperation, inclusivity and resilience, and global engagement—the blueprint has guided the region through significant transformation.
Asean now stands as the fifth-largest global economy and the second-largest recipient of foreign direct investment.
Intra-Asean trade, long criticised for its modest share of overall trade, has grown substantially in value, increasing from US$353 billion in 2007 to over US$856 billion by 2022.
Tools like the Asean Single Window have further facilitated cross-border trade, enhancing regional supply chain integration.
Yet intra-regional trade remains proportionally low compared to blocs like the European Union or United States-Mexico-Canada Agreement, reflecting fragmented regulations and non-tariff barriers that continue to undermine the promise of a truly unified market.
Even as Asean becomes more globally connected, the integration of its own markets still falls short of potential, revealing a paradox that demands urgent resolution.
Progress of the AEC's second pillar, the fostering a competitive and innovative region, has been uneven. All Asean members now possess competition laws and regulatory authorities, up from just five in 2014.
However, innovation capabilities remain concentrated in a few member states, such as Singapore, Malaysia and Vietnam.
Others lag in research capacity, digital adoption and skills readiness, highlighting the widening disparities that could threaten the region's collective competitiveness in an era shaped by technological disruption, green transition demands and intensifying geopolitical tensions.
Without convergence in regulatory standards and innovation ecosystems, Asean risks falling behind.
Connectivity, both physical and digital, has improved markedly, but access remains unequal.
While major infrastructure and logistics upgrades have reduced costs and streamlined processes, the digital divide continues to disadvantage marginalised populations and less developed economies.
Bridging this gap requires not only expanded broadband access and affordability, but also harmonised data governance, cybersecurity standards and digital economy frameworks. Without these foundational reforms, Asean's ambition to become a global digital hub will remain aspirational.
As the AEC Blueprint 2025 nears completion, Asean must look beyond the percentage of goals fulfilled. The "ASEAN Post-2025: Reimagining the ASEAN Economic Community" report by the ISEAS-Yusof Ishak Institute rightly points to a shifting context, one marked by climate volatility, inflationary pressures, geopolitical realignments and vulnerable supply chains.
In such a world, resilience must become the cornerstone of the AEC's next chapter. That means integrating climate risk into economic planning, embedding equity and social protection into regional frameworks, and developing agile institutions capable of collective crisis response.
Institutional reforms, particularly in monitoring and dispute resolution, are essential to reposition Asean as a proactive, credible and responsive economic bloc.
Equally important is reaffirming Asean's people-first ethos. Economic integration must deliver tangible benefits to workers, small businesses and communities, not just corporations or state actors.
This calls for deeper cooperation in skills recognition, labour mobility and digital upskilling, alongside expanded access to economic opportunities across all segments of society.
Sustained prosperity will depend not only on growth rates or trade volumes, but also on how inclusively Asean can unlock the potential of its people.
Externally, Asean must continue to play a constructive role in shaping global trade and investment flows. Its central role in initiatives like the Regional Comprehensive Economic Partnership offers an avenue for reinforcing multilateralism and stabilising regional architecture.
This outward posture must be matched by inward cohesion. Asean's credibility abroad will increasingly rest on its ability to deliver at home.
From blueprint to breakthrough, the AEC has evolved from a set of frameworks into a platform of real consequence. The challenge now is to build a bolder, more coherent vision.
One that enhances integration, deepens trust and places people at the centre. Asean must move beyond box-ticking towards building a resilient, inclusive, and future-ready.
The writer is part of the Secretariat under Yayasan Sukarelawan Siswa for the Asean Summit 2025.