SE Asia prepared to be world's new economic powerhouse

LABUAN BAJO, Indonesia — The Association of Southeast Asian Nations is demonstrating its confidence in becoming a new global economic powerhouse, which was reflected at a summit held from May 10-11 in the Indonesian town of Labuan Bajo.

This year's 42nd ASEAN Summit was held under Indonesia's ASEAN chairmanship.

"We have a strong asset as the epicenter of growth, an economy that grows far above average global economic growth, demographic bonuses and sustained regional stability," Indonesian President Joko Widodo said on May 10 at the summit's opening session.

In his remarks at the summit, Vietnamese Prime Minister Pham Minh Chinh, quoted by Vietnam News Agency, highlighted three core factors to ASEAN's characteristics — values, vitality and reputation — which have helped the regional bloc maintain independence and strategic self-reliance, transform into a growth epicenter and better adapt to external shocks.

In an April report, the Asian Development Bank projected that the economies in the Asia-Pacific region will grow 4.8 percent this year and next year, up from 4.2 percent in 2022, adding that growth in the region remains resilient.

Leaders and senior officials are engaging in productive bilateral and multilateral meetings. For example, Widodo met with Pham Minh Chinh on May 9 and discussed joint efforts toward a bilateral trade target of $15 billion by 2028.

On the same day, leaders from Indonesia and Timor-Leste agreed to form a joint working group for economic development in their border areas. Indonesia proposed immediate talks on a bilateral investment treaty.

"When we talk about ASEAN being the epicenter of growth, it is related to opportunities," Indonesian Tourism and Creative Economy Minister Sandiaga Uno said at a news conference on May 10, emphasizing the opportunities in the electric vehicle sector.

Indonesia has been on track to promote EV use in the archipelago and the region amid an energy transition to reduce emissions.

An agreement on developing a regional EV ecosystem was ratified during the summit to build ASEAN into a global production hub for the EV industry.

ASEAN has set a target of raising the proportion of renewable energy in its energy mix to 23 percent by 2025 for a low-carbon future.

In his opening remarks, Widodo mentioned the implementation of the Regional Comprehensive Economic Partnership as part of efforts to reinforce inclusive cooperation for ASEAN in the future.

The trade deal comprises 15 Asia-Pacific countries, including the 10 ASEAN member states of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and ASEAN's five trading partners, namely China, Japan, South Korea, Australia and New Zealand.

According to the World Bank, RCEP, the world's largest free trade area, covers 2.3 billion people or 30 percent of the world's population, contributes $25.8 trillion or about 30 percent of global gross domestic product, and accounts for $12.7 trillion or over a quarter of global trade in goods and services.

Noting that China and ASEAN are each other's largest trading partners, Indonesian Tourism and Creative Economy Minister Sandiaga Uno said he saw "the relationship between ASEAN and China beneficial for the world".

The International Monetary Fund said in April's World Economic Outlook report that the reopening and growth of China's economy will likely generate positive spillover for countries with stronger trade links and reliance on Chinese tourism.

"After China's reopening of its borders, we are looking to achieve more equitable and more sustainable operations, and with better quality in terms of trade and investment between ASEAN and China," Uno said.

Xinhua