Mr. Singh observed that in recent years, a global shift towards protectionist economic policies and climate change concerns has been observed, primarily in developed Western economies. In contrast, the ASEAN region has embraced openness and resilience as key drivers of economic growth.
In November 2020, amid the challenges posed by COVID-19, the 10 ASEAN member states finalised the world's largest Free Trade Agreement—the Regional Comprehensive Economic Partnership (RCEP)—with major trading partners including Japan, China, South Korea, Australia, and New Zealand.
Simultaneously, ASEAN initiated efforts to modernise and expand its Free Trade Agreement, incorporating elements related to circular economy, gender equality, and enhanced market access. These negotiations are expected to conclude in 2024.
This openness and economic strength have positioned ASEAN as a growth engine in the post-COVID-19 era. Geopolitical shifts, RCEP's trade connectivity, and robust domestic growth have attracted significant Foreign Direct Investment (FDI) and global supply chains, driven by both geopolitical factors and the imperative to decarbonise value chains. This shift in supply chain dynamics is not only motivated by the need for natural resources but also by a redesign of manufacturing value chains to meet decarbonisation goals.
These developments have contributed to ASEAN's resilience and growth. Economic forecasts suggest an approximate 4.5% growth in the current year, with another 4% or more projected for the following year. While adjustments in global trade patterns have occurred recently, ASEAN remains on course for positive growth.
Technological shifts, accelerated by the digital revolution and COVID-19, are transforming industries and societies in ASEAN at an unprecedented pace. The Fourth Industrial Revolution, featuring artificial intelligence, blockchain, and the Internet of Things, is no longer a collection of buzzwords but integral components of daily life and business operations. In light of these challenges and opportunities, ASEAN declared itself the epicentre of growth at the 43rd ASEAN Summit in Jakarta. This declaration underscores the commitment to navigate global challenges and fully harness the region's growth potential while strengthening resilience, embracing digital transformation, and fostering sustainable ecosystems.
The focus for the coming years includes enhancing our resilience in critical areas such as food security, finance, and energy. In the realm of food security, integrated logistics networks and local food resources are being developed, while the finance sector is advancing regional payment connectivity and local currency transactions. In the energy sector, the ASEAN power grid and trans-ASEAN gas pipeline are being fully implemented, alongside other regional interconnection projects and multilateral electricity trading.
In agriculture, sustainable practices are being embraced, reducing the use of harmful agrochemicals and promoting food and environmental protection. The private sector is called upon to share expertise and resources to support these initiatives.
The rise of the ASEAN digital economy, adding an estimated US$1 trillion to the GDP by 2030, is a significant driver for the region. The ASEAN digital economy framework agreement, a legally binding digital accord, has the potential to further boost the digital economy by another US$1 trillion by 2030. However, this growth also presents challenges related to the digital divide, cybersecurity threats, and the need for increased investment in digital infrastructure and human capital development. Practical solutions from the private sector are sought to promote digital inclusivity.
ASEAN's commitment to sustainability is reflected in its approach to carbon neutrality, which involves strategies and priorities to complement member states' NDP targets. This pathway could add another US$5.3 trillion to ASEAN's economic value and generate 66 million jobs by 2050. Financing, particularly in the green sector, needs to be scaled up to meet the region's transformation needs. Sustainable financing initiatives in ASEAN must adapt to cover transition financing and attract necessary investments in emissions reduction.
Collaborative partnerships and creative capital mobilisation are key to ensuring that even small-scale projects can access green financing. By engaging with private sector partners, such as UOB, ASEAN aims to drive economic, technological, and sustainable development. These efforts are paving the way for a prosperous and resilient future in the region.
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