ESCAP: ASEAN Must Prioritise Sustainable Investment, Narrow Development Gaps Among Member States

By Nur Athirah Mohd Shaharuddin & Nabilah Saleh

KUALA LUMPUR, Feb 20 (Bernama) -- The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has emphasised the need for ASEAN to adopt sustainable and inclusive investment strategies as key drivers of economic resilience and growth.

United Nations Under-Secretary-General and ESCAP executive secretary Armida Salsiah Alisjahbana said this was crucial to narrow the development gaps between high-growth economies and less-developed member states.

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Although ASEAN has made significant economic progress, development disparities remain a challenge.

“ASEAN’s 10 member states are not developed equally. We need stronger regional initiatives to bridge these gaps, ensuring that all ASEAN nations benefit from economic progress, not just the more advanced economies,” she told Bernama in an interview recently. 

Alisjahbana also emphasised the importance of narrowing development gaps through regional economic initiatives, including the ASEAN Regional Investment Promotion Action Plan, which ESCAP supports.

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With Malaysia as chair, she said this is an opportunity for Putrajaya to push forward regional economic transformation given these challenges.

“ASEAN has long been at the centre of economic development and growth in the Asia-Pacific region, driven by trade, investment and connectivity. We must ensure that these pillars are reinforced with sustainability and inclusivity,” she said.

Alisjahbana stressed the need for sustainable investment frameworks, particularly in renewable energy, digitalisation and infrastructure development. 

She cited the ASEAN Power Grid project, which Malaysia is championing, as a regional energy transition initiative that can enhance economic resilience.

“Malaysia is pushing for greater renewable energy integration within ASEAN through the ASEAN Power Grid. This initiative, which connects renewable energy sources from Laos, Thailand, Malaysia, and Singapore, is a step towards a more sustainable and secure energy future for the region,” she said.

Beyond energy, she said investment policies must also support small and medium-sized enterprises (SMEs) to ensure a more equitable economic landscape.

“ASEAN must not only attract foreign direct investment (FDI) but also make sure that investment policies benefit all layers of society, particularly SMEs which form the backbone of many ASEAN economies,” she added.

ESCAP is working closely with Malaysia’s Investment, Trade and Industry Ministry (MITI) to organise the ASEAN Investment Forum to promote sustainable and inclusive investment strategies.

“The forum will serve as a critical platform for investment promotion agencies across ASEAN to facilitate sustainable investment flows into the region. We are working with Malaysia to ensure that green and inclusive investments remain at the core of ASEAN’s economic agenda,” she said.

She also highlighted Malaysia’s leadership in digitalisation and connectivity as an essential driver of economic growth. The ASEAN Digital Economy Framework Agreement (DEFA), a key initiative under Malaysia’s chairmanship, aims to accelerate digital transformation across the region.

“Digitalisation is a game-changer. Malaysia’s push for the ASEAN DEFA is crucial in ensuring that ASEAN economies remain competitive and adaptable in the global digital landscape,” she said.

She also said investments in biofuels, solar energy and carbon capture storage (CCS) could create new economic opportunities across multiple ASEAN countries.

“Malaysia and Indonesia, as major palm oil producers, have an opportunity to lead in biofuel investments, while other ASEAN countries can develop supporting industries in solar and carbon capture technologies. This kind of cross-border investment cooperation is crucial for sustainable economic growth,” she said.

With Malaysia leading ASEAN this year, ESCAP sees strong leadership and commitment to economic transformation as critical factors in ensuring the region’s sustainable growth.

“We have high confidence in Malaysia’s leadership. Prime Minister Datuk Seri Anwar Ibrahim has a clear vision and assertive leadership in driving ASEAN forward with new economic dynamics. This is a pivotal moment for ASEAN to solidify its role as a global economic powerhouse,” she concluded.

With the upcoming ASEAN summit focusing on trade and investment policies, ESCAP hopes Malaysia will use its chairmanship to push for bold economic reforms, prioritising sustainability, inclusivity and regional cooperation.

Alisjahbana was on a two-day visit to Malaysia from Feb 17-18, 2025. She met Prime Minister Datuk Seri Anwar Ibrahim, Foreign Minister Datuk Seri Mohamad Hasan, Housing and Local Government Minister Nga Kor Ming and the Economy Ministry’s Deputy Secretary-General (MACRO) Datuk V Valluvan to discuss regional issues.

-- BERNAMA