ASEAN in a Turbulent Global Order

by | Jan 22, 2026 | Uncategorized | 0 comments

Title: ASEAN in a Turbulent Global Order: Leveraging Diversity, Neutrality, and Resilience for Strategic Advantage

Abstract
Amid intensifying global geopolitical shifts, climate crises, and rapid digital transformation, Association of Southeast Asian Nations (ASEAN) faces unprecedented challenges. However, a World Economic Forum (WEF) panel in January 2026 underscored that ASEAN’s unique attributes—its cultural and economic diversity, geopolitical neutrality, and adaptive resilience—position it as a critical player in navigating this complex landscape. This paper explores how ASEAN can harness these strengths through strategic collaboration, digital innovation, and human capital development, while addressing key challenges. It emphasizes the role of the Digital Economy Framework Agreement (DEFA), regional connectivity, and inclusive growth in securing ASEAN’s future.

  1. Introduction

The global order is undergoing profound transformation, marked by heightened geopolitical competition, artificial intelligence (AI)-driven disruptions, and escalating climate vulnerabilities. For ASEAN, a region historically defined by its pluralism and strategic centrality, these shifts present both risks and opportunities. Speaking at the 2026 WEF panel in Davos, Thai Deputy Prime Minister Ekniti Nitithanprapas identified three “mega shifts”—geopolitics, AI, and climate change—as central to ASEAN’s future. The panel stressed that ASEAN’s diversity, neutrality in global trade, and growing economic resilience offer a foundation to thrive in this turbulent era. This paper argues that ASEAN must accelerate integration, invest in digital collaboration through the DEFA, and prioritize skills development to turn challenges into competitive advantages.

  1. Challenges Facing ASEAN
    2.1 Geopolitical Turbulence

ASEAN’s location at the crossroads of the Indo-Pacific has long made it a focal point of global powers. Recent shifts, including the U.S.-China strategic rivalry and India’s rising influence, have intensified pressures. While ASEAN nations strive to maintain geopolitical neutrality, internal disparities in alignment with major powers create friction. For example, Vietnam and the Philippines seek closer U.S. ties for security, while Thailand and Malaysia emphasize economic diplomacy with China. This fragmentation complicates unified regional responses to external pressures.

2.2 AI and Digital Transformation

AI has the potential to revolutionize productivity but also risks exacerbating job displacement and inequality. As highlighted by Asian Development Bank (ADB) President Masato Kanda, inadequate education and digital skills threaten to undermine ASEAN’s demographic dividend. Without proactive measures, ASEAN risks social instability akin to global unrest observed in 2025.

2.3 Climate Vulnerability

Climate change poses existential threats to ASEAN’s economic model, with millions exposed to rising sea levels and extreme weather. Islands like the Philippines and Indonesia face agricultural and infrastructure losses, while supply chains across the Mekong Delta and Borneo are increasingly vulnerable.

  1. Opportunities from ASEAN’s Strengths
    3.1 Diversity as a Catalyst for Innovation

ASEAN’s 10 member states, with their unique cultural, linguistic, and economic profiles, offer a dynamic ecosystem for problem-solving and innovation. Indonesia’s QRIS system, for instance, demonstrates how localized solutions can be scaled regionally. The panel emphasized that diversity, if channeled through collaboration, can foster competitive innovation in sectors like fintech, e-commerce, and agriculture.

3.2 Neutral Trade as a Safe Investment Hub

ASEAN’s geopolitical neutrality in trade, as noted by Ekniti, positions it as a magnet for global investors. Thailand’s Deputy Prime Minister cited investor confidence in ASEAN’s ability to maintain open trade relations with both the West and China. By consolidating intra-regional trade (which already accounts for 26% of total trade) through initiatives like the Regional Comprehensive Economic Partnership (RCEP), ASEAN can amplify its appeal as a stable hub.

3.3 Resilience in Economic and Environmental Shocks

ASEAN’s economies have shown remarkable resilience amid global crises. Zurich Insurance Group’s Tulsi Naidu highlighted how the region outperformed expectations during 2025’s geopolitical shocks and high tariffs. Strengthening climate and cyber resilience through regional frameworks will further solidify this advantage.

  1. The Digital Economy Framework Agreement (DEFA): A Pathway to Integration

The DEFA, a landmark digital economy pact under negotiation since 2023, represents ASEAN’s most ambitious step toward digital integration. Covering digital trade, cross-border data flows, cybersecurity, and digital identity, the agreement aims to create a seamless digital ecosystem. By enabling interoperability—such as Indonesia’s QRIS with Thailand’s PromptPay—DEFA can reduce transaction costs and foster inclusive growth. Indonesia’s Minister Meutya Viada Hafid emphasized that DEFA would serve as an “operating system,” harmonizing fragmented digital policies across the region.

  1. Human Capital and Skills Development

ASEAN’s success in the AI era hinges on education and skills. ADB President Kanda warned that inadequate training could lead to social instability, citing global unrest linked to job displacement. To mitigate risks, ASEAN must:

Expand STEM education and vocational training programs.
Promote cross-border skills-sharing initiatives, such as ASEAN Vocational Training Centers.
Invest in digital infrastructure, particularly in rural and island regions, to close the digital divide.

  1. Policy Recommendations
    6.1 Accelerate Digital Integration under DEFA
    Finalize and implement DEFA by 2026, prioritizing harmonization of data governance and cybersecurity protocols.
    Expand interoperable payment systems like QRIS to facilitate cross-border digital trade.
    6.2 Prioritize Inclusive Growth
    Allocate public and private funding for AI literacy and reskilling programs.
    Strengthen regional connectivity via infrastructure projects such as the ASEAN Highway Network and digital corridors.
    6.3 Enhance Climate and Cyber Resilience
    Develop a regional climate adaptation fund, drawing from green investments.
    Establish a joint ASEAN cybersecurity center to counter transnational cyber threats.
  2. Conclusion

ASEAN stands at a pivotal juncture. While global turbulence demands vigilance, the region’s diversity, neutrality, and resilience provide a unique strategic edge. By accelerating digital integration through the DEFA, prioritizing human capital development, and fostering climate resilience, ASEAN can transform challenges into opportunities. The panel’s insights reinforce that ASEAN’s strength lies not in uniformity but in its ability to collaborate across differences. As Thailand’s Ekniti asserted, “closer cooperation” rooted in shared foundations will be key to securing a prosperous and sustainable future.

References

World Economic Forum Panel Discussion, “Is ASEAN Moving Fast Enough?”, Davos, January 22, 2026.
Asian Development Bank, 2026 Economic Outlook for Southeast Asia.
ASEAN Secretariat, Digital Economy Framework Agreement (DEFA) Negotiation Progress Report.
Zurich Insurance Group, Risk Insights on Climate and Cyber Resilience in Southeast Asia.