The 42nd ASEAN Summit, held in Labuan Bajo, East Nusa Tenggara (NTT) Province on May 9-11, 2023, marked a turning point in strengthening the economy of the Southeast Asian region. Leaders of the member countries gathered at the summit to discuss vital issues ranging from tackling human trafficking, ensuring protection for migrant workers to developing the electric vehicle ecosystem and cushioning payment connectivity in the region.
Under Indonesia’s leadership, this year’s ASEAN Summit showcased the strength of regional countries as the engine of world economic growth. This has been deemed significant due to the economy of Southeast Asia growing above the world average and securing a large market share of approximately 600 million people, or a market value of US$2.3 trillion. Additionally, the stability in ASEAN’s economic growth encourages economic integration through several initiatives under the 2025 ASEAN Economic Community (AEC) blueprint.
Further efforts to bolster the ASEAN and Indonesia’s trade in the future require their success in boosting intra-ASEAN trade since it currently stands at around 22 percent. These trade initiatives saw various events such as the ASEAN Economic Ministers (AEM) Retreat 2023, where economic ministers from Southeast Asian countries ratified seven regional economic priority achievements. The agreement included creating a cooperation framework to facilitate trade in the service industry within ASEAN, signing the second protocol of the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), establishing a Regional Comprehensive Economic Partnership Agreement (RCEP) in Jakarta, amongst others. These initiatives were aimed at achieving progressive economic growth for Southeast Asia, but more so for Indonesia, as the most populated country in ASEAN.
The Mid-Term Review of the ASEAN Economic Community Blueprint 2025 confirmed that intra-ASEAN trade needs to grow by 13.5 percent per year in the 2022-2025 period to achieve the target set in 2017, namely, doubling the trade value. The success of the 42nd ASEAN Summit is expected to increase the gross domestic product (GDP) of Southeast Asian countries by 3-15 percent and be able to create approximately six million potential new jobs and increase ASEAN’s cross-sectoral competitiveness in the global market.
The ASEAN Summit offers significant momentum that various business sectors can utilize, ranging from tourism, technology, infrastructure to trade. Business actors must be observant in noticing the opportunities both during and after activities. The focus must be on capitalizing on programs designed by the ASEAN Business Advisory Council (ABAC) to increase trade and encourage Indonesian exports.
To broaden and deepen economic connectivity with partner countries in the region, it is vital to create innovation, take initiatives and not just wait for the government or stakeholders to help business owners. The ASEAN countries should build an economic community through a person-to-person and business-to-business approach, believed to accelerate regional transformation through centrality, innovation, and inclusivity.
It is imperative to note that this good momentum will only be celebratory if utilized optimally, including efforts by Indonesia to broaden and deepen economic connectivity with partner countries in the region. The key to this will be constant innovation, initiative-taking, and not waiting for the government or stakeholders to help business owners. This way, the 42nd ASEAN Summit in Labuan Bajo, NTT, can bring sustainable impacts on trade in Indonesia and the Southeast Asian region.
