ASEAN Chairmanship In 2025 Marks Pivotal Moment For Malaysia

By Siti Radziah Hamzah

KUALA LUMPUR, Dec 22 (Bernama) -- In less than two weeks, Malaysia will take on the ASEAN chairmanship in January 2025, marking a pivotal moment for the country.

The ASEAN economic and policy bloc, comprising 10 Southeast Asian member countries, stands as the world’s fifth-largest economy, with a total gross domestic product (GDP) of RM3.8 trillion in 2023 and a combined population of 677 million.

Within Southeast Asia, political shifts have been particularly noteworthy in recent years.

From Malaysia’s significant regime change to the return of familiar leaders and political families in Indonesia, the Philippines, and Cambodia, these developments are generating renewed hope and possibilities for ASEAN’s citizens and its future.

SPI Asset Management managing partner Stephen Innes said Prime Minister Datuk Seri Anwar Ibrahim has actively engaged with Southeast Asian leaders since assuming office in November 2022, leveraging his extensive political and economic expertise to strengthen regional ties.

He added that Anwar’s focus on collaboration is pivotal, especially as ASEAN faces transitions with new leaders in Indonesia and Thailand. 

“These changes introduce challenges and opportunities for Anwar as Malaysia prepares for its ASEAN chairmanship. Key issues such as South China Sea disputes and evolving BRICS partnerships will test his diplomatic acumen, emphasising the need for consensus and adept negotiation skills,” Innes told Bernama. 

ASEAN saw changes in administration in many of its member countries in 2024. In May 2024, Singapore’s Lawrence Wong was sworn in as the country’s fourth prime minister, while the current Thai prime minister is Paetongtarn Shinawatra, who assumed office in August.

In October, Prabowo Subianto was inaugurated as the eighth president of Indonesia, the world’s most populous Muslim-majority nation. 

Institute of Strategic and International Studies analyst for foreign policy and security studies Angeline Tan said ASEAN is entering a new phase with Malaysia’s assumption of the chairmanship and presents member states with the opportunity to have a fresh start for discussions and negotiations.

“ASEAN is in a new phase. It is difficult to make progress on challenging and sensitive issues like the South China Sea, for example, when you are dealing with a fresh set of leaders who lack familiarity with each other. You won’t have the same kind of relationship or trust. 

“So it’s a process which I think the prime minister has been trying to start this year in preparation for our chairmanship next year,” she told Bernama in an interview recently. 

Touching on the South China Sea disputes, Tan said that besides Malaysia, other claimant states are involved in making any decision on the Code of Conduct in the South China Sea (COC) challenging.

“It is not just China that poses a problem. Claimant countries like the Philippines, Vietnam and Malaysia all have a role to play here.

“So as long as tensions continue to be heightened in the South China Sea, it will be very difficult for us to de-escalate and come to a conclusion for the COC,” she added.

Digital economy agreement is a significant influence on ASEAN’s economy 

ASEAN anticipates its digital economy will grow from US$300 billion (US$1 = RM4.50) to US$1 trillion by 2030. To accelerate this growth, the region is focusing on enhancing the ease of digital transactions with the goal of doubling this figure through the Digital Economy Framework Agreement (DEFA). 

Innes said there is guarded optimism that the DEFA could be finalised in 2025, driven by the region’s accelerated digital transformation post-Covid-19. 

He noted that the success of DEFA hinged on establishing a unified regulatory framework that addresses data privacy, cybersecurity, and cross-border data flows.

“Harmonisation is essential for fostering a predictable business environment, enhancing digital inclusivity, and encouraging innovation.

“Over the next decade, DEFA is poised to significantly influence ASEAN’s economic landscape by creating a cohesive digital market. This initiative will facilitate smoother cross-border commerce, spur innovation, and potentially bridge the digital divide across member states, enhancing regional competitiveness,” he said. 

However, Innes emphasised that implementing DEFA posed substantial challenges due to varying levels of digital infrastructure, diverse regulatory landscapes, and economic disparities among ASEAN countries. 

He said addressing these issues would require considerable investment and a balanced approach to technological advancement and cultural integration, ensuring that all member states benefit equitably from the digital economy.

ASEAN-China relations 

ASEAN became China’s largest trading partner, surpassing the European Union in 2020. In 2023, trade with ASEAN nations represented 15.9 per cent of China’s total foreign trade, with bilateral trade reaching US$468.8 billion, marking a 10.5 per cent increase from the previous year.  

However, there are concerns about China’s influence in the region, especially when Malaysia and some other ASEAN countries joined BRICS. 

Addressing this, Tan said China’s growing influence was a natural progression, considering the size of its economy and geographical proximity, which made any pushback difficult.

She noted that the idea of joining BRICS stemmed from the idea of having alternatives and working with other partners.

Tan said that associating with BRICS should not only be about China or Russia but to cultivate relationships with other BRICS partners. 

Trump’s presidency

Regarding Trump’s presidency, Tan expects there will be more targeted policies against China, and ASEAN will probably be affected by these actions. 

However, she anticipates that ASEAN will not be a primary target when Trump takes office in January. 

“I’m aware that China has learned from Trump’s first term. When the trade war happened, China started to prepare itself by strengthening its supply chains and bolstering its self-sufficiency. They are more prepared now than in 2016 for any kind of economic shocks that the US might target against them. 

“Hopefully, Washington will consider that they can’t just throw out tariffs or protective measures targeting China and expect it will hurt because China has learned from its lessons in 2016 and has taken measures to protect itself,” she added.

-- BERNAMA