Asean

Redazione published in Asean, Economy and trade

The Agrifood Sector in ASEAN

Navigating the Challenges of Climate and Technology in a Key Economic Driver

Article by Luca Menghini

The agrifood sector plays an essential role in the ASEAN economy, both as a pillar of food security and as a crucial source of employment, particularly in rural areas. In a region where staple crops like rice, palm oil, seafood, and fruits are central to daily life, agriculture supports millions of people and remains a key component of GDP in countries such as Myanmar, Cambodia, and Laos. However, as climate change accelerates, environmental pressures are threatening these vital resources, posing significant challenges to both regional stability and economic growth. The ASEAN agrifood landscape, which has long been the backbone of food supply in Southeast Asia, is facing unprecedented pressures from climate change, deforestation, and biodiversity loss.

Southeast Asia has always been susceptible to extreme weather. Today, there are increasingly erratic weather patterns, such as floods, heatwaves, and droughts, which disrupt crops and make food production less predictable. Rice, a staple food for millions, is particularly vulnerable to temperature fluctuations and water shortages, putting both livelihoods and food security at risk. It should be noted that agriculture is a major contributor to greenhouse gas emissions, particularly through rice paddies, livestock farming, and land clearing for plantations. Rice cultivation, for example, produces significant methane emissions, while the expansion of palm oil and other plantations often results in deforestation and biodiversity loss. Balancing the need to feed a growing population with the need to reduce environmental impact is a complex challenge that highlights the necessity for strategic action by ASEAN member states.

ASEAN countries are beginning to recognize these issues, as highlighted by initiatives like the ASEAN Vision and Strategic Plan of Action for Food, Agriculture, and Forestry, which aims to address climate and food security challenges. On an individual level, countries are implementing their national programs, such as Vietnam's 'One Million Hectare Low Emission Rice' project. Through this initiative, Vietnam aims to reduce greenhouse gas emissions from rice production by 30% by 2030, demonstrating how targeted agricultural reforms can contribute to both climate goals and food security. However, the scale and urgency of these efforts underscore the need for greater collaboration among ASEAN countries to effectively mitigate environmental impacts.

To address these challenges, the adoption of new technologies is increasingly recognized as a viable solution for enhancing productivity while simultaneously reducing agriculture’s environmental impact. Innovative tools, such as drones and Internet of Things (IoT) sensors, allow farmers to monitor crop health, soil conditions, and water levels with unprecedented precision. Data analytics and machine learning also provide valuable insights for optimizing fertilizer and water usage, thereby enhancing yields and reducing environmental strain. This transition toward 'smart farming' enables more efficient resource allocation and reduces the ecological footprint of agrifood production. Through precise application of water and nutrients, these tools help to stabilize yields even in volatile climates, thus strengthening food security. The private sector’s role in driving this shift, from developing technology to offering training, is crucial to ensuring that smallholder farmers across the region can access and implement these advancements.

ASEAN has laid a foundation for collaborative responses to these challenges. Programs such as the ASEAN Integrated Food Security Framework and the ASEAN Climate Resilient Network support shared agricultural standards and practices, fostering resilience across national borders. Cross-border cooperation allows for the pooling of resources, dissemination of sustainable farming techniques, and implementation of early warning systems, which are essential for building adaptive capacity across the region. For example, Singapore’s Centre for Climate Research has offered to share climate data with neighboring countries, aiming to enhance agricultural planning and resilience. Such collaborative initiatives demonstrate how regional integration can enhance resilience and optimize resource use.

Moving forward, ASEAN’s agrifood strategies beyond 2025 must prioritize sustainable farming practices and technological adoption. Governments can build on current initiatives by creating policies that support the scaling of technologies, such as IoT-enabled smart farming, which will reduce waste and increase crop efficiency. In addition, expanding initiatives like Vietnam’s low-emission rice project to other member countries would be a strong step toward regional sustainability. A post-2025 framework that includes public-private partnerships will be vital for realizing the agrifood sector’s climate goals. Collaborative projects between governments and the private sector can also provide financial and technical support to smallholder farmers, helping them to adopt resource-efficient practices and participate in environmentally responsible markets. Enhanced regional coordination and information-sharing mechanisms, such as the ASEAN Food Security Information System, would further support these efforts by providing timely data on food supplies and weather conditions.

As ASEAN’s agrifood landscape faces these complex challenges, maintaining a balance between agricultural productivity and climate resilience is essential for sustainable development. Technology adoption and regional cooperation offer pathways to achieve this balance, but success will require concerted efforts from all ASEAN member states. With ongoing investments in sustainable practices and a shared commitment to climate action, ASEAN’s agrifood sector can continue to provide food security, employment, and economic stability for millions across the region. In the face of climate and environmental challenges, ASEAN must strengthen its collective action and foster a resilient, adaptable agrifood system to safeguard the well-being of its populations and ensure sustainable growth in the years ahead.

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ASEAN's initiatives on cyberspace

The particularity of ASEAN's cybersecurity activism is related to its close collaboration with international organizations and especially INTERPOL

By Emanuele Ballestracci

Cyberspace is a global digital network that is embedded in every aspect of modern daily life. It includes not only the Internet, but also the critical infrastructures that support modern societies, such as power grids, water supply systems, banking transactions, and transportation systems. Over the past two decades, the rapid evolution of cyberspace has affected the way societies communicate and interact in the political, economic and social spheres. Since 1988 with the creation of ICANN, therefore, the first attempts to create a global Internet governance system, initially focused on managing technical aspects, have emerged. As cyberspace has expanded, especially since the beginning of the new millennium, attempts to regulate this “new” dimension of public and private life have increased exponentially.

Today there is a constellation of public and private initiatives for the multilateral management of cyberspace, the promotion of cooperation among various stakeholders and the protection of individual users. In recent years, particular attention has been given to the issue of cybersecurity, and almost all regional organizations have launched initiatives in this regard. However, the initiatives of the various G7, NATO, BRICS, Arab League and Eurasian Union have in common the defect of limited collaboration with international organizations, despite their great activism on the subject. Indeed, the United Nations has over the years launched a long series of working groups and conferences to revitalize global governance in this field. INTERPOL through its Global Cybersecurity Program also aims to be an effective partner in fighting crime in cyberspace. However, all these initiatives are not being adequately leveraged by states and regional organizations, with the only exception of ASEAN. 

In 2016, ASEAN launched its first cybersecurity initiative: the ASEAN Cyber Capacity Program. The Program focuses on building the technical, legal, and institutional capacity of member countries to address cybersecurity challenges. It also provides training, knowledge sharing, and resources to support regional cooperation and coordination in addressing cyber threats. In 2017, the Program was followed by the publication by the ASEAN Cybersecurity Cooperation Strategy, which is four years in duration and renewed in 2021. The first Strategy focused on strengthening the cooperation and capacity building of national CERTs (Emergency Cyber Response Teams) and coordinating regional cybersecurity cooperation initiatives. The goal was to increase regional cyber capabilities against evolving and increasingly sophisticated cyber threats while avoiding duplication of resources. A regional CERT reporting directly to ASEAN was also established. The second Strategy, in continuity with the first, focuses on five main dimensions: promoting cooperation on cyber readiness; strengthening regional policy coordination; building trust in cyberspace; regional capacity building; and international cooperation.

However, as mentioned earlier, the particularity of ASEAN's cybersecurity activism is related to its close cooperation with international organizations and especially INTERPOL. The latter provides support to global law enforcement agencies in preventing and combating cybercrime through the promotion of greater cooperation and training of local officers. Thus, in 2018 INTERPOL established the ASEAN Cybercrime Operations Desk in order to address the growing cyber threats in the region. The ASEAN Desk is the regional hub for information and intelligence exchange on cybercrime. Through the capacity of INTERPOL's Cyber Fusion Centre and public-private partnerships it provides a range of strategic analysis products that enable ASEAN authorities to make effective decisions on preventing and combating crime in cyberspace. Also launched in 2020 is the ASEAN Cybercrime Knowledge Exchange Workspace, which enables law enforcement agencies to share nonoperational information such as best practices and open source information on threats in the region. Finally, also since 2020, the ASEAN Cyber Threat Assessment has been published annually. The report offers analysis and insights into the current cybersecurity risk landscape, as well as policy recommendations for future action.

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Redazione published in Asean, Global Lens

ASEAN at COP29

ASEAN's approved policy paper on combating climate change, a pathfinder for participation in the ongoing summit in Baku

ASEAN member countries express deep concern about the continued rise in global greenhouse gas emissions and the consequence of increased climate risks and impacts on natural and human systems, which remains a significant threat to ecological diversity in the ASEAN region and, in general, to the sustainability of the development gains we have achieved to date. We want to draw attention to the cost of climate change to ASEAN economies, which represents an estimated economic loss of $97.3 billion between 2009-2020 and an estimated adaptation cost of $422 billion through 2030 for the region. We want to highlight the significant progress and new opportunities provided by COP28 and the UAE Consensus to ensure a stable climate, which is an important basis for sustaining development gains in the ASEAN region, taking into account the common but differentiated responsibilities of ASEAN States Parties. For this reason, we call for accelerated implementation of climate action and financial mechanisms under the UNFCCC as evidence of commitment to climate action and rapid and equitable energy transition. We call for recognition of persistent gaps in the implementation of ambitious agreed climate actions, including mitigation, adaptation and finance. And we look forward to the fulfillment of the means of implementation as committed by developed countries, namely finance, technology development and transfer, and capacity building, including the development and implementation of low-emission technologies and enabling infrastructure, which are critical to our transition to a regional low-carbon economy and to ensuring the ability of ASEAN and developing countries to access climate finance. We also look forward to the implementation of decisions taken at previous COPs to strengthen financial support for climate action in developing countries. We also call for recognition of the potential contributions of ASEAN member states through emission avoidance, emission reductions, emission removals, and carbon stock enhancement, depending on scientific and technological advances, international cooperation, and increased support from developed countries, including relevant initiatives related to carbon markets by ASEAN member states to serve as a model for an integrated approach to sustainable development and climate resilience in the region.

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Redazione published in Asean, Global Lens

The framework of Italy-ASEAN economic relations

In recent years, bilateral trade and direct investment have increased exponentially, thanks in part to the HLD. Now there is room for further growth

Economic relations between Italy and ASEAN are continuously deepening. The High Level DIalogue on ASEAN Italy Economic Relations 2024, which took place on November 5 and 6 in Manila, was an opportunity to highlight the current state of relations and discuss how to further strengthen them. As shown in the position paper published by The European House Ambrosetti at the event, the ASEAN-Italy trade interchange is worth more than $20 billion, of which $9.7 billion is represented by Italian exports to ASEAN and $12 billion refers to ASEAN exports to Italy. In the past six years, the total trade interchange between Italy and ASEAN has grown by 38 percent, more than the United Kingdom, Germany and France, highlighting the great dynamism of Italy-ASEAN economic relations.

The instruments of economic cooperation between ASEAN and Italy are diverse and multifaceted. They include trade agreements, investment treaties, joint ventures and economic and technical cooperation programs. These instruments aim to reduce trade barriers, promote investment, foster technology transfer and strengthen economic ties between the two regions. Together, they build resilient and mutually beneficial economic partnerships. To date, Italian FDI in ASEAN is worth 7.7 billion euros, while ASEAN FDI amounts to more than 800 million euros. These are exponential increases since the HLD editions began and since the Italy-ASEAN Association was founded. 

As Lorenzo Tavazzi, Senior Partner and Board Member of The European House Ambrosetti, points out in his position paper, the concrete results achieved in recent years are remarkable. A few examples? The opening of production units, design and service centers in Vietnam, Thailand and Indonesia by an Italian company operating in the metallurgical sector; the opening of a production plant by 2 Italian motorcycle manufacturers in Thailand and Indonesia; the inauguration of a new tire production plant in Thailand; the acquisition of a minority stake in an Italian cosmetics manufacturer by a sovereign wealth fund owned by the Singapore government; the increase in exports of Made in Italy products to ASEAN, particularly to Singapore, Malaysia, Thailand and Vietnam; and the introduction of training and business courses for access to the ASEAN market offered by Italian government agencies.

There is enormous potential for growth in some areas. For example on digital. ASEAN today has different levels of digital and environmental preparedness and is prioritizing green growth and technology adoption, with the goal of improving regional competitiveness, especially through the deployment of artificial intelligence, a robust startup ecosystem, and 5G infrastructure. Italy, with its strong industrial base and advanced technologies, is focusing on clean energy, sustainable practices and digitization to boost economic growth and resilience and can help increase ASEAN competitiveness. As ASEAN countries continue to prioritize resilience and innovation, high-tech sectors such as space offer critical support to ensure business continuity, regional stability, and cooperation in a highly strategic sector. Italy, renowned for its expertise in advanced technology and research, has much to contribute to ASEAN's growth in these areas. The potential for joint projects, technology transfer and knowledge sharing is significant and offers both regions unique advantages of collaboration. Not surprisingly, just in the past few weeks the ASEAN-Italy Cooperation Initiative on Space and Smart Technologies project was concluded with an event at the headquarters of the Italian Space Agency (ASI) in Rome. The initiative, financed by the Ministry of Foreign Affairs and International Cooperation, Directorate General for Globalization and Global Issues, is part of the formal framework of the partnership stipulated between MAECI and the ASEAN Secretariat and called ASEAN-Italy Development Partnership (2022-2026). And it aims among other things to create business opportunities, increase international presence, and improve scientific knowledge based on shared experiences, best practices and lessons learned.

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High Level Dialogue on ASEAN-Italy Economic Relations: the speech by Ambassador Michelangelo Pipan

The speech by Ambassador Michelangelo Pipan, President of the Italy-ASEAN Association at the High Level Dialogue on ASEAN-Italy Economic Relations in Manila

When the Italy ASEAN Association was founded with the intent of promoting relations between Italy and the ASEAN countries, back in 2015, the world was a very different place: in virtual absence of major troubles the economy was booming, interest rates were low thanks to equally low inflation, free trade was reigning, globalisation was the name of the game. In that context the Association’s job in pursuing its goals was rather straightforward, although everything but easy: as Italian businesses were far from tapping the extraordinary opportunities offered by the ASEAN countries, it was necessary to attract their attention to and increase their awareness of the vast openings existing in each and every ASEAN member country and the very favourable atmosphere provided by the ASEAN stance towards international trade, let alone the strong sympathy everything Italian enjoyed in the area. In 2015 ASEAN became a Community also in the economic field, making possible a practically unhindered circulation of goods and capitals. Then came the RCEP agreement opening up an enormous common market in this part of the world. Those achievements consolidated the ASEAN role and made its member countries an even more appealing partner, one that could not be overlooked. In fact the Italian government did not fail to realise that and sought the status of ASEAN’s Development Partner, which was achieved in 2020. Since its inception the Association pursued its mission mostly implementing awareness activities with the support of its members, some of the major Italian Corporations, and in cooperation with the Italian official bodies. We soon realised that it was of the utmost importance to bring the Italian CEOs to ASEAN to meet their counterparts, to see with their own eyes the dynamism of the people, governments and entrepreneurs in these countries. That’s how the cooperation with TEH Ambrosetti was initiated and the HLDs started. 

Fast forward nine years, so much has changed on the global stage. After the disruption brought about by the pandemic and the subsequent expectations arising from the unprecedented financial resources made available by many governments and international organisations, war broke in Eastern Europe, then in the Middle East, in South Sudan, inflation rose, so did interest rates, trade barriers started to be Introduced and then strengthened . The world is now a totally different place. But how have these portentous events changed the landscape for us, for the perspectives of the relations between the EU and ASEAN? How are they affecting the work of our Association? Well, if anything, I am convinced that ASEAN as well as our work have become more relevant, because in a scenario where containment, confrontation, inward looking attitudes seem to take hold in so many places and cause a dangerous fragmentation of the international order., Asean stands out for the perseverance in sticking to its founding principles: a stalwart champion of free-trade as a means to growth and peace - convinced that stability can be achieved through development and vice versa ,an unconditional supporte of multilateralism, ASEAN’s policy remain that of resorting to discrete diplomatic dialogue for the solution of controversies, a policy so intrinsically linked to the success of the association that has been dubbed “the ASEAN Way”. In recent times, this has been coupled with the “ASEAN Centrality” a concept that - extending the other basic ASEAN principle of non-interference - signifies the unwillingness of the block to be pushed to take sides in the major power’s contest for predominance in the area. No wonder only a few days ago, when participating to the 14th ASEAN- UN summit in Vientiane , the SG of the UN, Mr Gutierrez, praised the Association as a “wonderful model for the world….a bridge builder and a messenger for peace “, lauding is commitment to multilateralism and its efforts to defuse tension by prioritising dialogue and respect of international law. At the same time in spite of geopolitical uncertainty and conflicts, the World Bank estimates that global trade to GDP ratio has reached 74%, exceeding pre pandemic levels. According to other authoritative sources world exports have grown 1,8% last year and are looking to grow 3.5% in 2024. In this scenario it has been said by experts on the area that “South East Asia is poised to be the biggest winner in global trade over the next decade, even amid (possible) escalating confrontation between the major powers”. Moreover, last year the six major ASEAN economies attracted more FDI than China (that incidentally looks to become soon the major foreign investor in the area). On top of this ASEAN continues to look ahead and is drafting a new ASEAN Community Vision 2045 to be adopted next year. At the same time the EU is advancing its work for the establishment of FTAs with more ASEAN nations, including the Philippines our host this year. All this considered, the work of our Association has become even more essential, in my view, for the reciprocal benefit of Italy and the ASEAN countries. A lot can be achieved thanks to a strong complementarity: we have In front of us a rich tapestry of opportunities can can be woven on the solid framework of the EU-ASEAN relations. It is thus a great privilege to hold the 8th edition of the HLD in Manila and we are most thankful to the Philippines government to host it. We are also extremely grateful to the many organisations and individuals whose commitment contributed to make it happen. I align myself to the individual thanks that were presented earlier by Mr Tavazzi. I know from personal experience- back in 1981 Manila was the first posting abroad of my diplomatic career- of the many opportunities for bilateral cooperation the stand in front of our two countries and the rest of ASEAN. Having expanded considerably since then, they are clearly spelled out in today’s program and reach out to the most contemporary fields of activities - let me remind you that the World Intellectual Property Office has chosen the Philippines as pilot country for measuring the contribution of the creative industry to GDP. I trust they will get a significant impulse today thanks to your discussions. In conclusion, I wish you the best of success and thank you for your kind attention.

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ASEAN and BRICS

We publish here an excerpt from Chan Chian Wen's editorial, which appeared in Nikkei Asia

A common critique of BRICS lacks the cohesion necessary for long-term stability. However, ASEAN's five-decade track record proves otherwise. This group of 10 Southeast Asian economies serves as a real-time case study of how political and economic diversity can coexist while fostering peace and prosperity. ASEAN comprises Muslim-majority, Buddhist-majority, and Christian-majority countries, all with multi-ethnic and multi-cultural societies. These nations don't even share the same political systems. Yet, ASEAN's continued existence and prosperity serve as a powerful rebuttal to the notion that a diverse mix of countries cannot function effectively together. ASEAN's proven record of neutrality has long supported regional stability; now it should extend its influence to help reduce conflict risks beyond its borders. While BRICS aims to foster economic multipolarity, it is often viewed by Washington as aligned with its geopolitical rivals, Moscow and Beijing. ASEAN, without such baggage, is uniquely positioned to ease concerns over BRICS being perceived as anti-Western. ASEAN can also benefit from BRICS's growing commodity exchanges, which provide an opportunity to boost sustainable economic growth and improve food security. By protecting commodity-dependent economies from excessive speculation, BRICS exchanges help mitigate price volatility, a key threat to ASEAN's stability. Furthermore, BRICS countries play significant roles in global supply chains for both raw and value-added commodities. Many experts believe the world is on the cusp of a new commodity super-cycle, driven by decades of underinvestment in resource extraction and refining infrastructure. BRICS, with its significant lead in this space, is well-positioned to cushion the socio-economic fallout of such a cycle -- an advantage that ASEAN lacks. With global trends shifting toward electric vehicles, lithium batteries, nuclear energy, semiconductors and electrification, ASEAN risks falling behind without deeper engagement with BRICS. Additionally, BRICS offers access to alternative platforms for financial transactions, such as blockchain. By linking settlement currencies to neutral reserve assets like gold, ASEAN could reduce its exposure to the risks of sharp fluctuations in the U.S. dollar. For ASEAN to maintain true neutrality, it must adopt a platform-agnostic approach to financial transactions in global trade and investment. In conclusion, it is not in ASEAN's best interest to passively observe attempts to reverse the trend toward multipolarity, including the forging of closer ties between BRICS and ASEAN.

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The surge of investment in Southeast Asia

Growing role of private equity and venture capital in ASEAN countries

By Luca Menghini

In 2023, the private equity (PE) and venture capital (VC) sectors in ASEAN countries witnessed significant developments, despite facing substantial headwinds in the global economic landscape. The ASEAN region, with its continuously expanding and growing middle class and a very young population, continues to attract numerous investors, particularly in the technology, healthcare, and infrastructure sectors. These sectors are crucial drivers of growth in an increasingly competitive market and in a constantly evolving global market.

The Southeast Asian private equity market ended 2023 with a total of 22 deals amounting to $3.9 billion. This figure represents a decline compared to previous years, largely due to macroeconomic challenges such as inflation and high interest rates. However, experts remain optimistic, given the young workforce and increasing demand for innovative solutions, which is expected to drive future growth. Venture capital performed very strongly, with assets under management reaching a record $27.3 billion in 2023, highlighting the resilience and potential of the region's startup ecosystem.

The healthcare sector emerged as a key area for private equity investments in 2023, accounting for 36% of total deals. The growing demand for an improved healthcare sector capable of offering more advanced services, driven by the fact that the average ASEAN population is aging and simultaneously becoming wealthier and able to afford higher-level care, has created numerous opportunities for investors. In addition to healthcare, the other sector that attracted the most attention was technology and telecommunications, which accounted for around 31% of private equity investments.

Investments in infrastructure were a dominant theme in 2024, with the sector accounting for 78% of total private equity deals in the second quarter of this year. As Southeast Asian countries prioritize the transition to a low-carbon economy, opportunities in renewable energy and sustainable infrastructure projects have attracted the interest of numerous investors. Additionally, the region's strategic location as a hub for global trade has made investments in digital technologies and, more generally, in digital transformation, along with physical infrastructure, vital for its economic future. This has led private equity activities to focus on sectors aimed at redesigning and transforming regional supply chains and increasing commercial connectivity.

Despite the encouraging and optimistic trends, the private equity and venture capital sectors in the ASEAN landscape are facing significant challenges. The macroeconomic environment remains uncertain, with concerns related to inflation and interest rate fluctuations creating unfavorable conditions for transnational deals and agreements in general. Additionally, the number of exits is in sharp decline, fundraising has decreased, and investors are adopting a more cautious approach. Exit conditions remain difficult, with many private equity firms opting for secondary sales over initial public offerings (IPOs) due to a sluggish public market.

Nonetheless, there is a high level of available liquidity, which remains ready to be used, positioning investors optimally to capitalize on future opportunities. Experts predict that the consumer goods sector, education, and financial services will see an increase in investments in the coming years as ASEAN economies stabilize and continue on high-growth trajectories.

Looking ahead, the continued development of the Southeast Asian private equity and venture capital markets will be shaped by digital transformation, innovations in healthcare, and the need for sustainable infrastructure. These sectors offer the greatest promise both for investors and governments seeking to strengthen the region's competitiveness in the global economy. With a young, tech-savvy population and a rapidly growing middle class, ASEAN is positioned to remain a bright spot for private equity and venture capital investments in the years to come.

In conclusion, while the private equity and venture capital sectors in ASEAN are not without their challenges, the region's growth prospects remain strong and stable. The focus on infrastructure, healthcare, and technology, along with the availability of capital, allows Southeast Asia to continue being a key destination for investments in global markets. Investors are likely to maintain a cautious but optimistic approach as they navigate the opportunities and risks that come with investing in one of the most dynamic regions in the world.

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The Role of Artificial Intelligence in ASEAN

Artificial intelligence is set to radically transform Southeast Asia, with estimates suggesting a potential increase in regional GDP of up to $950 billion by 2030

By Luca Menghini

In recent years, the role of artificial intelligence (AI) has captured the attention of governments and industries worldwide, and Southeast Asia is no exception. ASEAN’s ability to harness AI’s potential has become a relevant topic, especially considering the region's diverse economies, ranging from countries with advanced digital infrastructure, such as Singapore, to emerging economies still working to overcome digitalization challenges.

Although AI can bring significant economic benefits, the challenge of governance and innovation requires a collective response from ASEAN member states. A crucial moment for AI governance in the region was marked by the publication of the "ASEAN Guide on AI Governance and Ethics" in February 2024. This guide presents a comprehensive approach to establishing a region-wide framework based on principles such as transparency, fairness, and accountability. The aim is to balance regulation with innovation, considering the diverse socioeconomic conditions of member countries.

The guide promotes the voluntary adoption of these guidelines, offering recommendations at both regional and national levels. This makes it a flexible but essential tool for aligning AI development with ethical and sustainable practices. Some member states, such as Singapore, have already developed national strategies. Singapore's "Model AI Governance Framework," updated in 2023, represents an example of how a government can implement AI policies to foster technological growth and responsible use. Indonesia and the Philippines are also following this example, aiming to propose a regional AI regulatory framework by 2026.

Artificial intelligence is set to radically transform Southeast Asia, with estimates suggesting a potential increase in regional GDP of up to $950 billion, or 13%, by 2030. However, the disparity in investments and infrastructure among ASEAN countries poses a challenge to fully realizing this potential. Singapore attracts most AI investments in the region, surpassing large economies like Indonesia and Malaysia. In 2023, Singapore secured $8.4 billion in venture capital for AI, compared to $1.9 billion for Indonesia and just $95 million for Vietnam.

Efforts to close this gap include collaborations with major AI companies, such as the partnership between Singapore, Malaysia, and Nvidia to build supercomputers and enhance AI-related manufacturing. These initiatives are crucial for positioning the region as a hub for AI innovation, particularly in sectors such as healthcare, agriculture, and finance. Local AI developments, such as PhoGPT in Vietnam, show how ASEAN countries are starting to carve out a niche in the global AI ecosystem, addressing the region’s specific needs.

Although the benefits of AI are evident, concerns are growing about the environmental impact of data centers and the high energy consumption required to train large language models. It is expected that AI development will double the number of data centers globally by 2030, with a corresponding increase in electricity consumption. For ASEAN, this poses a sustainability challenge, especially in countries heavily reliant on fossil fuels.

The ASEAN Guide on AI Governance has begun to address these concerns, promoting AI practices that take environmental and sustainability factors into account. With AI’s growing importance, member states will need to shift toward advanced technologies that consider environmental implications, potentially making AI a key element in both economic growth and climate resilience.

To fully exploit AI’s potential, ASEAN countries must collaborate more effectively, especially in areas like cross-border data flows, skill development, and regulatory harmonization. The new AI Guide suggests the creation of an ASEAN working group to oversee AI governance initiatives and facilitate knowledge sharing between more advanced economies, like Singapore, and less developed ones, such as Cambodia and Myanmar.

Initiatives aimed at building a workforce prepared for AI are of fundamental importance. Singapore’s AI apprenticeship programs serve as a model for improving and expanding the regional workforce, a crucial factor in mitigating the negative effects of automation. Expanding such programs across the region could help ensure a more equitable distribution of AI benefits.

The rise of AI in ASEAN presents both a significant opportunity and a challenge. On the one hand, it offers a path to substantial economic growth and technological leadership. On the other, it requires careful governance to ensure ethical, sustainable use and equitable access across the region. The recent steps taken by ASEAN, including the publication of the AI Governance Guide, demonstrate a commitment to responsible AI development. However, to truly accelerate the AI era in the region, ongoing developments, investments in innovation, collaboration, and inclusive growth will be necessary.

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Scam Cities’ issue in Asia

This is how Southeast Asian countries are trying to counter the phenomenon

Article by Francesca Leva

A phenomenon that has emerged in Asia, specifically in South-East Asia, since the outbreak of the COVID-19 pandemic is the one of the so-called “Scam Cities”. A UN Office on Drugs and Crime report estimated that “the scam industry is earning criminal groups the equivalent of billions of US dollars.” Moreover, these earnings are comparable to the gross domestic product (GDP) of certain countries in the region. The study indicated that in an undisclosed Southeast Asian nation, conservative estimates placed the scammer's earnings between US$7.5 billion and US$12.5 billion, which is nearly half of that country's GDP in 2021.

The victims of this human trafficking activity are typically young citizens from China Mainland, Hong Kong, Taiwan, Thailand, the Philippines, and other Southeast Asian countries. However, as this activity expands, more and more victims are recruited from India, Africa, and Latin America. With the promises of a profitable new career - as well as VISAS, paid flights, and proof of accommodation – individuals are lured into moving to a new country to pursue a promising career. However, upon arrival, the victims are then directly transferred to prison-like compounds, usually located outside casinos or on the outskirts of the cities. There, individuals are turned into prisoners and forced to buy their freedom back by working for the owners of these activities. The illegal activities individuals are forced to undertake vary from online scams for money, romance-investment scams, crypto fraud, money laundering, and illegal gambling. Phil Robertson, Asia director for the advocacy group Human Rights Watch, declared that: “The litany of rights violations are shocking, including false recruitment, stripping people of their passports and other identity documents, abductions and trafficking, confinement, debt bondage, forced labor, physical beatings, and sexual abuse”.

Police authorities identified some hotspots in the eastern Shan State in Myanmar, situated adjacent to China in the northern region, along with various locations in Cambodia such as Poi Pet, Sihanoukville, and Svay Rieng, as well as other sites, including those in the Philippines and the Golden Triangle Special Economic Zone in Bokeo, northwest Laos. However, many of these cities are located alongside or in the Special Economic Zones (SEZs), which, due to the relaxed regulation devised to attract investments, turn into lawless areas controlled by private security firms, over which local police have no control.

Interestingly, this phenomenon poses a threat to China for both internal policy reasons and cross-border security, making it a geopolitical issue. For the former, gambling has been outlawed by the Communist Party since 1949, both in China and abroad: engaging in any type of gambling, including online gambling, gambling outside the country, or establishing casinos abroad to target Chinese nationals as main clientele specifically, is deemed unlawful. This is mainly due to the fact that Beijing considers capital outflows and illegal gambling as a threat to its social stability. This has transformed Asia’s gaming industry: most of the casinos that opened in Southeast Asia were explicitly opened to attract Chinese citizens, and this strategy has proven to be effective: every year, almost 1trn yuan ($144bn) leaves China for gambling purposes, and an estimated fifth of outbound flights from China is for gambling trips. In the SEZ along the Chinese border, the business is flourishing: Golden Triangle Special Economic Zone in northern Laos is the Kings Romans Casino is controlled by Zhao Wei, a Chinese national who craftily devised its activities as “patriotic.” Jason Tower, country director for Myanmar at the United States Institute for Peace, declared: “A lot of these individuals set up patriotic associations overseas and try to demonstrate, in a very public manner, allegiance to Communist Party initiatives – and they fund those initiatives […], they extend the reach of the international front on Taiwan issues. They go after Westerners who criticize China on Xinjiang or Tibet. And they’re making it difficult and costly for the state to crack down because it would mean making some of the Chinese state initiatives look bad.”

In Myanmar, fraudulent hubs are overseen by local militias in collaboration with the military junta governing the nation, fostering a symbiotic relationship that yields benefits for both sides. Situated near the Chinese border, these hubs endanger Chinese nationals drawn to them and pose a threat to cross-border stability, leading to mounting impatience from China. This discord creates an opportunity for dissenting factions within Myanmar, as opposed to military authority, to eliminate these fraudulent hubs—as witnessed in October 2023—and convey solidarity to China. This alignment could potentially translate into future backing from China, shaping the course of the civil conflict in Myanmar.

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ASEAN's Global Vision

An excerpt from the final communiqué of the ASEAN Foreign Ministerial, which took place last week in Laos

We stressed the importance of strengthening ASEAN's unity and centrality in our engagement with external partners, including through ASEAN-led mechanisms such as ASEAN Plus One, ASEAN Plus Three (APT), the East Asia Summit (EAS), ASEAN Regional Forum (ARF), and ADMM-Plus, in order to build mutual trust and strengthen an open climate and an open, transparent, resilient, inclusive, and rules-based regional architecture, with ASEAN at the center, upholding international law. We stressed the need to promote an environment conducive to peace, stability and prosperous development for all, ensuring a culture of dialogue and cooperation rather than rivalry, strengthening mutual trust and respect for international law. We reaffirmed that ASEAN will act in accordance with ASEAN's centrality in external political, economic, social and cultural relations by remaining actively engaged, outward-oriented, inclusive and non-discriminatory, in line with the ASEAN Charter. We noted with satisfaction the encouraging progress in ASEAN's relations with our Dialogue Partners, Sectoral Dialogue Partners, and Development Partners through existing frameworks and the implementation of Action Plans, Practical Cooperation Areas, and Development Cooperation Programs based on mutual interest and mutual benefit in contributing to ASEAN Community building and development cooperation efforts. We have agreed to further strengthen partnerships and cooperation with our partners thus contributing to our proactive response to regional and global challenges and opportunities. We are committed to fostering an outward-oriented community that supports the region's sustainable growth and resilience through inclusive cooperation and collaboration with external partners. We noted the growing interest from countries and regional organizations outside the region to develop stronger substantive collaboration and cooperation with ASEAN, including through requests for formal partnerships. We affirmed the importance of pursuing an outward-oriented policy and agreed on the need to reach out to new potential external partners on the basis of shared interest, constructive engagement and mutual benefit. We noted the growing global relevance of ASEAN and its unique “convening” power in the context of the emerging multipolar global architecture.

Full communiqué here

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Redazione published in Asean, Global Lens

ASEAN and the possible Trump bis

We publish here the excerpt of an analysis by Joshua Kurlantzick for the Council on Foreign Relations

After the debate for the United States presidential elections, even in South-East Asian countries people are starting to wonder about the possible meaning of a possible return of Donald Trump to the White House. In recent years, with the exception of the Philippines under Ferdinand Marcos Jr., who strongly sided with the United States, the countries of the ASEAN area have attempted to maintain their traditional multipolar approach between the two great powers. This is demonstrated very well by the actions, always based on the principle of neutrality, of Indonesia and Vietnam. But a second Trump administration could increase tensions between the United States and China to the point that even Southeast Asian countries, long adept at striking a balance, may find it difficult to avoid taking sides. A second Trump administration is unlikely to focus much on the region. In his first term, Trump forged personal ties with some Southeast Asian leaders, such as former Philippine President Rodrigo Duterte. Overall, however, Trump has given the region a relatively low priority. Furthermore, his protectionist approach to trade stood in stark contrast to the economic integration that had occurred throughout East Asia. In this vacuum, however, it was the great powers such as Japan and China that led the economy. Trump gave many speeches in the 2023-2024 election season and talked a lot about China. He made little, if any, mention of a future approach to Southeast Asia. In addition to trying to keep the Philippines firmly in the U.S. camp, a second Trump administration would likely put enormous pressure on states like Indonesia, Malaysia, Vietnam, Singapore and perhaps others to go along with U.S. efforts to push multinationals, including those based in Southeast Asia, to leave China, moving their supply chains. Trump, intensely focused on the belief that virtually all foreign countries trade unfairly with America, may be even less shy, in a second term, about imposing tariffs on the same Southeast Asian states.

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Redazione published in Asean, Global Lens

Italy-ASEAN: in Manila the eighth High Level Dialogue

Back in November is the High Level Dialogue on ASEAN Italy Economic Relations, the initiative that The European House - Ambrosetti and the Associazione Italia ASEAN have been implementing since 2016

Di Lorenzo Tavazzi, The European House – Ambrosetti

The landmark event for bilateral relations between Italy and ASEAN countries is back: the High Level Dialogue on ASEAN Italy Economic Relations, the initiative that The European House - Ambrosetti and the Associazione Italia ASEAN have been carrying out since 2016 and this year reaches its eighth edition.

Each year the High Level Dialogue is hosted by an ASEAN country: this year it will take place in Manila, Philippines, at the Dusit Thani Hotel, on Tuesday, November 5 and Wednesday, November 6, 2024, with the support of the Philippine government, through the Department of Trade and Industry (DTI), as co-organizer of the event.

The Dialogue, since its first edition in 2017 in Indonesia, and subsequent editions in Singapore, Vietnam, Malaysia, and Thailand, along with two digital editions in 2020 and 2021, has brought together more than 3,500 presidents, CEOs, and government and institutional leaders from ASEAN countries and Italy. The 2023 edition alone, held in Bangkok, was attended by more than 450 high-profile delegates.

This year's Dialogue will address a number of priority issues for the development of Italy-ASEAN relations with a dual character in partnership opportunities between Italian companies and their counterparts in Southeast Asia. These include: the supply chain of critical raw materials for the strategic sectors of the future, artificial intelligence and digital innovation, the role of the blue economy for economic cooperation, the evolution of the creative industry, opportunities for technological and industrial collaborations in space, defense and high-tech manufacturing, financing and services to support the development of sustainable businesses and infrastructure. 

Within this framework, the specificities and opportunities offered by the Philippines, with which Italy celebrated 75 years of bilateral relations in 2022, will also be explored.

Participation in the High Level Dialogue is free and by invitation only. 

To register for the event: Registration

To get more information about previous editions of the event: High Level Dialogue website

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