By Mehmet Enes Beşer
The growing geopolitical tensions and fragmentation of the regional order pose serious challenges for Southeast Asia. The Indo-Pacific geopolitical dynamics – fueled by strategic rivalry between the United States and China, competing supply chains, and contradictory security alliances – make stability in East Asia more uncertain than it was since the end of the Cold War. In this unstable environment, however, ASEAN maintains a significant leverage – albeit not through military projection or grand strategic narratives but rather through economic diplomacy.
Historically, one of the most powerful traits of ASEAN diplomacy has been its convening, mediating, and integrating capacity. Through regional frameworks like ASEAN+3, East Asia Summit, or Regional Comprehensive Economic Partnership (RCEP), ASEAN established disproportionate influence vis-à-vis its economic or military power. Despite the common criticism of ASEAN’s lack of strategic boldness and the slowness of its decision-making processes, one should recognize the effectiveness of this organization in creating cooperative mechanisms which defuse the tensions.
Perhaps, one of the key areas of economic diplomacy through which ASEAN can help establish stability in East Asia is through the RCEP agreement. With 15 members and almost a third of the world’s economy, RCEP proves how effectively ASEAN was able to organize an international effort to create the world’s largest trade bloc. Unlike fragmented bilateral relations or ideologically-driven pacts like the Trans-Pacific Partnership (TPP), RCEP represents ASEAN’s pragmatic vision of how the region should evolve by reducing trade barriers and unifying rules of origin.
The interdependence which emerges in such an economic environment may not be enough to prevent conflicts in East Asia, yet it still plays an important role as an instrument of deterrence. Being interconnected by economic relations means higher costs of starting any conflict, greater interest in preserving stability, and continued communication channels even after a break of traditional diplomacy. As ASEAN connects China, Japan, South Korea, and Australia through the same trade and investment regime, the trend towards binary alignment becomes less pronounced.
Apart from trade agreements, economic diplomacy is an effective way of setting an agenda for ASEAN countries. Initiatives like ASEAN Economic Community (AEC) and ASEAN Framework for Digital Data Governance show how this organization starts shaping digital standards. Such issues, however, are crucial for regional economic security. In particular, digital sovereignty poses one of the most challenging dilemmas that ASEAN faces today. Instead of taking sides with either the United States or China in this matter, ASEAN should promote principles of interoperability, privacy, and cross-border flow of data. These standards could de-escalate the situation.
Additionally, economic diplomacy helps ASEAN cope with global challenges, including the recent pandemic. While other parts of the world were hit by food supply chain problems and shortages of medical supplies, ASEAN played a crucial role in maintaining their integrity and providing economic resilience in East Asia. For example, during the COVID crisis, the bloc ensured the safety of food supplies and coordinated the vaccine procurement process to avoid further complications.
While the success stories of ASEAN’s economic diplomacy are numerous, one cannot deny the threats to its future prospects. First, it is worth noting internal factors, like developmental differences among member states and political instabilities in some of them. Inequalities between Singapore – a highly developed nation – and some poorer members, like Laos and Myanmar, may hinder the development of coherent policies in ASEAN. In turn, democratic backsliding in some ASEAN nations could hurt investor confidence.
Second, there are external factors, like the resurgence of spheres of influence between the East and West in Asia. Both the Chinese Belt and Road Initiative and Western efforts to promote their Indo-Pacific strategies provide attractive economic opportunities linked to strategic partnership. In such circumstances, ASEAN risks losing its influence by becoming just another piece in great power games.
To preserve its status, ASEAN needs to continue reforms aimed at increasing integration of the region, both in terms of its economic relations and policy decisions. Specifically, it should work on the harmonization of digital regulations, deepen financial cooperation by using existing frameworks, and promote intra-regional investments through various measures. Also, ASEAN should propose new mechanisms to bring economic resilience to its non-traditional security discussions, like climate change, food security, and supply chain management.
Furthermore, ASEAN should strengthen its “omni-enmeshment” strategy by engaging with all powers of the international system without being caught in a dependency trap. ASEAN needs to ensure that infrastructure, technology, and trade preferences do not become tools to undermine regional stability and unity. For example, Master Plan on ASEAN Connectivity (MPAC) 2025 could also contribute to digital and institutional connectivity in East Asia.
Conclusion
As the geopolitics around the Indo-Pacific region becomes increasingly zero-sum, ASEAN’s economic diplomacy provides a unique opportunity to promote coexistence through integration rather than exclusion. By building economic resilience based on the rule rather than competition, and preserving its convening power, ASEAN creates a stable environment for sustainable regional development.
It would be wrong to claim that ASEAN is capable of indefinitely maintaining stability in East Asia despite great power rivalry. Nevertheless, ASEAN’s economic diplomacy – if combined with institutional innovations and strategic thinking – could lay the groundwork for a new order in Asia.
Thus, ASEAN will be able to move from being just a diplomatic facilitator to a key architect of the economic development of the region and thereby strengthen its own strategic position.