The Association of Southeast Asian Nations (ASEAN) is stuck at an impasse. The political and economic union of 10 member states in Southeast Asia has faced mounting internal divisions and has struggled to deliver on its mandate of promoting intergovernmental cooperation and facilitating economic, political, security, military, educational, and sociocultural integration between its members and other countries in the Asia-Pacific. As the rise of neighboring China provokes a shift in the global balance of power, many questions arise about how Southeast Asian nations will respond.

On April 6, 2023, APARC’s Southeast Asia Program hosted a group of experts who shared their views on how international relations in the region might unfold over the next decade. The speakers highlighted the prevailing challenges facing the region, including the deteriorating effectiveness of intergovernmental bodies like ASEAN, China’s ascendancy, the resultant shift in the global balance of power, prospects for economic growth, innovation in the digital sphere, and challenges to democracy.

The event was the fourth installment in a special series celebrating APARC’s 40th anniversary. Titled Asia in 2030, APARC@40, the series highlights core areas of the center’s expertise, examines Asia’s transformation over the past four decades, and considers the drivers and shapers of the region’s future.

The event featured Richard Heydarian, a Manila-based scholar and columnist who is currently a Senior Lecturer at the Asia Center of the University of the Philippines Diliman, Quezon City; Elina Noor, a Senior Fellow at the Asia Program of the Carnegie Endowment for International Peace in Washington, DC; and Thitinan Pongsudhirak, a Professor in the Faculty of Political Science and Senior Fellow at the Institute of Security and International Studies at Chulalongkorn University, Bangkok.

ASEAN’s Existential Crisis

Taking a cue from the event title, “Southeast Asia in 2030: The Future of Intermestic Relations,” the speakers first shared their reflections on what the region might look like in 2030. The future of the region is often correlated with ASEAN’s effectiveness. However, according to Thitinan Pongsudhirak, in order to answer this question, one must first disentangle the region and ASEAN, as analysts tend to conflate the two. “Perhaps we should not equate the positive future of Southeast Asia with the success of ASEAN,” he said. 

Pongsudhirak argues that ASEAN has remained in a state of perpetual decline since 2012, “when China began to become belligerent in the South China Sea and a divided ASEAN was not able to come up with a joint statement to address it.” The most salient points of division have also included ASEAN’s response to the humanitarian crisis in Myanmar and the emerging U.S.-China competition. “We are no longer seeing the buzz of ASEAN centrality, it has dissipated, and we now see a prolonged existential crisis of the organization.”

Furthermore, ASEAN has been eclipsed by new intergovernmental partnerships like The Quad and AUKUS. Pongsudhirak predicted that “in 2030, ASEAN will still be around, but in what form? If ASEAN continues in the way it has been working, with its informality and non-interference, it will lose its potency and will be an ineffective organization.” A potential future conflict between the U.S. and China would exacerbate these tensions, and in that case, “ASEAN as we have known it, will be finished,” he said. A possible alternative to this scenario would see “more minilateral partnerships or a restructuring of ASEAN with ‘the original five plus X’ as a better arrangement.”

Mixed Economic Prospects

Shifting away from the political sphere, Elina Noor provided a more optimistic view of ASEAN’s economic future, arguing that “we have to consider, when we look at ASEAN as a grouping, that we are dealing with ten very different nations, and we should come up with different metrics for success.” For Noor, one metric of success is what ASEAN has done for its people. “In this case, in the last 50-60 years of its existence, [ASEAN] has done quite well for its citizens. Proof of ASEAN’s success can be seen in its reducing reliance on the U.S. dollar and increasing use of local currency within the region.”

Noor also indicated that ASEAN has been bullish on everything digital. Malaysia, Indonesia, Singapore, and Thailand have all opened up digital currency systems, to use currency via QR codes. Noor pointed out that “we should view ASEAN as a success economically, not so much politically or in the security dimension.” For Noor, ASEAN’s capacity to facilitate commercial opportunities and enterprise puts the organization on the right track. Whether ASEAN will continue to innovate in the economic and commercial space and act more decisively on geopolitical issues remains to be seen.

Richard Heydarian agreed that, like Noor, he is very optimistic about the region on the economic front. Heydarian predicted that a shifting balance of power might lead to greater economic success for the region by 2030, stating that “we may have a new global GDP leader, China, which will have huge psychological and economic impacts. America’s financial supremacy is a pillar of its primacy [in Southeast Asia].” Heydarian predicted that Vietnam, the Philippines, and Thailand will grow to become trillion-dollar economies and reside more comfortably among the top 20-25 economies, stating that those nations may become part of an expanded G20. Heydarian also predicted movements of major supply chains to Southeast Asia, especially as Apple and other global brands attempt to back out of China. “Some will go to India, but a lot will go to Vietnam…Indonesia and the Philippines are going to be in the mix, so economically, I'm a little bit bullish on this part of the world in terms of aggregate growth.”

Pongsudhirak added a dissenting opinion, indicating that “the narrative of ASEAN’s economic success, with the region being one of the fastest-growing regions, with 700 million people combined with a combined GDP of over 3 trillion dollars, a growth trajectory of about 5.5 percent pre-COVID, a young demographic with a growing middle class and geographical proximity, this narrative now no longer holds.” He identified Thailand as subpar in terms of economic performance and argued that “the era of high growth—more than six to eight percent combined—is finished. In the 1980s and 1990s we saw a lot of that high growth, even in the 2000s, but in 2020, that narrative of regional economic success is now very mixed…Now you have to look at the different economies and economic engagements with the regions ‘à la carte’.”

Escalating Ideological Tensions

Breaking with his economic optimism, Heydarian identified ideological conflict as perhaps the most pressing challenge that the region will face in the coming years, stating that “this is where the ‘New Cold War’ will be entering a different phase. We went from strategic competition five to ten years ago, now we're already in strategic rivalry, but I think in five to ten years from now we may look at strategic enmity between China and the United States.”

In terms of gradations of competition between two superpowers, Heydarian predicts a far more intensified scenario in which a Taiwan contingency might unfold in the next decade. “Things could get very intense in Taiwan, and this is important because this is already putting pressure on countries like the Philippines. My sense is that the Philippines seems to be once again moving away from the pack, we're doing less hedging, and increasingly, there are already discussions of whether the Philippines is going to go for alignment.” For countries like the Philippines, which are close to Taiwan and have robust defense agreements with the United States, Australia, and other partners, “by 2030, some of us would be forced by that time to make a choice.”

Such fragmentation of existing partnerships may, in the view of the panelists, lead to increased minilateralism, the emergence of trans-governmental partnerships, flexible, ad hoc frameworks whose membership varies based on situational interests, shared values, or relevant capabilities. Heydarian indicated that “minilateralism is the de facto alternative to the ASEAN ten-state multilateralism deficit, but minilateralism will also cut across the region… JAPHUS for instance, the Japan-Philippines-U.S. trilateral could be something big in the next five to ten years because not only the U.S. but also Japan are bringing the Philippines into a broader Indo-Pacific strategy.”

Despite the challenges discussed, the stimulating conversation between the panelists served as an opportunity to explore avenues pointing towards a future rich with productive engagement with the region. While “Southeast Asia in 2030” may be unknowable for now, the panelists clarified some of the trends and directions in which the region may be headed, and envisioned some of the possibilities for its complex inter-state affairs.