Intro: Good afternoon and welcome to Policy Unpacked. Today's episode is entitled ASEAN At The Crossroads: Rethinking Economic Security.
In this episode, we explore how shifting geopolitical and geoeconomic dynamics are reshaping the economic landscape of the ASEAN region. For decades, ASEAN has largely taken a neoliberal approach to regional economic security, grounded in the belief that economic cooperation and integration among its member states would help ensure peace and stability, while also promoting prosperity for its people.
More recently, it has been strained by the longer-term economic repercussions of the conflict in the Middle East. Against this backdrop, a key question emerges. Does ASEAN's longstanding economic security paradigm remain fit for purpose? To help us answer this question, we are joined by three guest speakers who are leading experts in their fields.
Our first speaker, Dr. Su-Hyun Lee, Senior Associate Fellow at the Centre for Multilateralism Studies and Deputy Head of Graduate Studies at RSIS-NTU.
Our second speaker is Professor Mely Caballero-Anthony, Associate Dean (International Engagement) and Head of the Centre for Non-Traditional Security Studies, also at RSIS-NTU.
And our third speaker, my colleague Dr Barbora Valockova, Research Fellow at the Centre on Asia and Globalisation (CAG) at the Lee Kuan Yew School of Public Policy.
All three of our speakers today are contributors to the recently published special issue in Contemporary Southeast Asia entitled “Revisiting Economic Security in Southeast Asia”.
Let me start with Su-Hyun, my co-editor of the special issue. In the introduction paper, which we both co-wrote, argues that ASEAN's approach to economic security is distinctly homegrown, rooted in the region's post-colonial experience rather than imported from Western conceptual frameworks.
So how important is that distinctiveness, and does it remain an asset, or is it now a constraint?
Dr Su-Hyun Lee: Thank you very much for having me today.
So the introduction chapter Dr. Denis Hew and I co-wrote together basically argues that ASEAN's economic security links regional economic cooperation and integration very closely with the concept of regional peace and stability, and even domestic regime legitimacy.
So by homegrown approach, we do not mean that this specific approach, stems from abstract theorising or countries' concerns over industrial competition or geopolitical rivalry, as in the case of the advanced industrial countries. Rather, we see ASEAN’s homegrown approach to economic security. It precisely reflects what the region and ASEAN member countries were experiencing in the 1960s and 1970s in real terms, such as weak state capacity, underdeveloped economies, social fragmentation, or even the cases of domestic insurgencies.
So in that way, ASEAN's unique model of economic security, it might not be just considered mere pragmatism. It is a more genuine approach to address the very timely and important topics for the region as a whole. So I think that your question is very important, especially whether the distinctiveness in ASEAN's economic security is considered an asset or a restraint.
And my honest feeling is that to answer that question, I think it could be better addressed by slightly tweaking it, especially whether the current ASEAN’s economic security model has been really effective in addressing the challenges that ASEAN and its member countries have faced from a lot of changes and one would be the transition of the international order. And as our contributors suggest, there is a set of a polycrisis which includes increasing geopolitical pressures, increasing rivalry between the US and China, reconfiguration of the global supply chains, climate change, increasing inequality, pandemics, the list goes on.
So, as suggested in our special issue and a variety of key takeaways from contributors, our answers to the questions I think are quite sobering. We collectively find that ASEAN has been pretty adaptive in addressing challenges. But the one specific way ASEAN does to deal with the situation is pretty incremental and gradual rather than innovative.
So what they usually do when they face a specific challenge, it could be a financial crisis, trade disruption, or in other situations, ASEAN tends to add additional layers on institutions rather than changing the existing one. So eventually, we may need to think about how such distinctiveness of ASEAN's economic security has provided us so far. I think, one benefit, a very unique one, is that it was a really efficient way for ASEAN to maintain its legitimacy among member countries, especially given their variations in political systems, economic development or strategic consideration.
That said, I think what we need to think about upfront is distinctiveness itself might not suffice anymore. It should matter. It should not be abandoned. But we suggest that ASEAN's distinctiveness in approaching economic security should be reframed and recalibrated.
Denis Hew: Thanks, Su-Hyun. Mely, in your paper, you make a bold claim that ASEAN's dominant liberal market approach to economic security is not just under pressure, but is fundamentally inadequate for the polycrisis era that we are now living in. Can you walk us through the core of that argument and what you see as the most glaring governance gap?
Mely Caballero-Anthony: Thank you, Denis. Let me also start by saying that I think this is a very timely project, and asking the question as to whether ASEAN's approach to economic security is fit for purpose, I think is very timely.
And I take from what Su-Hyun has basically said that ASEAN's approach is a bit distinct. I wouldn’t use the word distinct, I would offer a different one. Maybe pragmatic is a better term because it tries to meld the more liberal approach with what was at the time the concerns of the day, paying attention to all the other challenges, non-economic, that would really jeopardise the economic trajectory of the region. And you talked about the need, for example, to establish regime security, if you like. So they had to take in a number of considerations: political, economic, socio-cultural, etc. But that was in what you said, early 60s or maybe 70s, 80s.
The world has really changed. And as Su-Hyun said, the international environment is characterised by a polycrisis of sorts. Denis, you mentioned the current crises. Apart from, of course, geopolitical competition that's heightening, supply chain resilience, there’s the lingering impact of Covid-19, etc. It's really now compounded by a resurgence of conflicts. And you mentioned recently in the last five weeks, the impact of the Middle East crisis, which has really, in a way, wiped out many of the recovery gains that many developing countries have just started to have.
And because of that, the question that our paper with my co-writer Dr Luis P. Montesclaros asked is: is the state really doing enough? And if you talk about ASEAN as a collective of 11 countries, are they doing enough to actually address what we would consider a more systemic crisis. And that's just on the more structural level.
But don't forget, we also have the impact of climate change. So with all of these crises in its various manifestations impacting not just the stability of the state, what we are really trying to argue is that it has significant consequential impact on the human security of its people. So ASEAN, has very often, even in its 2045 plan of action or vision, talked about a people-centered ASEAN. But if you look at it from the history of ASEAN's economic approach, it is very much state-centric, right?
So in our paper, we looked at revisiting the whole notion of a developmental state, but tweaked it to ensure that it comes with a human security lens to it. And what does it mean? It's no longer just concentrating on numbers, economic growth, really. But the impact is no longer just a trickle down effect. And even when you talk about increasing opportunities for investments, in light of all this economic fragmentation, the question should also be: what does this change? Whether you open up or you close, what will these changes have on the human security of people in the region?
And when you look at it from a human security lens, economic security is a very important component of human security. Human security is not just freedom from want, right? Where you have all of your developmental needs, whether it's food, shelter, health, a clean environment, being free from poverty. But it's also freedom from fear… fear and insecurity that comes from being deprived of the very basic necessities of human life.
And this is where we argue, that the state really has to rethink its approach to economic security and ask, when you look at ensuring the economic security of the state, are your people actually secure? Is there something that you need to do more to increase or to address the insecurity of different groups and individuals, particularly the vulnerable communities.
So it therefore talks about a human-centered developmentalism where there is conscious, deliberative kind of economic governance, where the state engages with all the critical actors of the society, whether it is the private sector, civil society organisations, humanitarian organisations, international organisations, because they could come in and support the role of the state and to ensure, as Su-Hyun has mentioned, that it continues to maintain that legitimacy. And legitimacy, after all, is really dependent on its ability to provide for the security of its people. That's why we have the social compact. So that is really the main essence of the paper and of the arguments that we're trying to make. Thanks.
Denis Hew: Thanks, Mely. So Mely has essentially given a different take on how we rethink the economic security approach, taking a much more human-centric view of how we approach the different policies on economic security, especially given the fact that we're living in a polycrisis world.
On that point, in your paper, Barbora, you argued that ASEAN's economic security governance has evolved through crisis-driven incremental adaptation rather than fundamental transformation. In layman's terms, what does that mean, and why does that distinction matter for how we assess ASEAN's effectiveness?
Barbora Valockova: Thank you, Denis, for the question. If I put my co-author Mae [Chow]’s and my argument in simple terms, we argue that in economic security, ASEAN has changed or evolved gradually in response to crises. And we draw from historical institutionalism.
So when we talk about a crisis-driven incremental adaptation, we mean three things. First, major shocks like financial crises, pandemics or trade wars function as critical junctures, which are the moments when new institutional mechanisms get created or existing ones are upgraded.
Second, these changes usually come in small layered steps. New working groups, new facilities, and new funds are grafted onto existing frameworks rather than replacing them. So this is institutional layering.
And third, over time, these small layers adapt to a more complex and capable architecture. Even though the ASEAN way, including consensus, non-interference and preference for informality, stays intact. And our article traces these across three crisis types.
So financial crises have pushed ASEAN towards more sophisticated regional financial safety nets. Health emergencies from SARS to Covid-19 have forced ASEAN to enhance cross-pillar coordination and trade disruptions like the US-China trade war. And the second Trump administration's tariffs have nudged ASEAN to accelerate integration initiatives.
And why does the distinction between incremental adaptation and fundamental transformation matter? It matters because it shapes how we evaluate ASEAN's effectiveness. If we expect an EU-style leap towards supranational authority after a series of crises, it will not happen and it is not adequate for ASEAN. Instead, what ASEAN delivers is a kind of cumulative, path-dependent upgrading of capacity. So each crisis leaves behind new or upgraded tools, procedures or linkages, but within the same core governance framework. So the real question is, given its constraints, has ASEAN learned and built more sophisticated mechanisms to protect economic security over time? And our argument is that, yes, but with limitations, especially on resources, speed and systematic evaluation.
Denis Hew: Thank you so much, Barbora. As I mentioned in my introduction, ASEAN's economic security model has been described as being built on a neoliberal framework. The idea that economic interdependence through close economic integration reduces the likelihood of conflict.
So let me ask you, Su-Hyun. Given the current wave of aggressive tariffs, particularly coming from the United States, supply chain fragmentation and great power rivalry between US and China, is that foundational logic still holding or is it outdated? Is it still fit for purpose?
Su-Hyun Lee: Thank you for the great question. So I'd like to start by suggesting that ASEAN's economic security model has been intellectually resonating pretty well, as you suggested, within the two pillars of international relations and international political economy theory.
So if we break down this neoliberal approach, one is the so-called commercial liberalism, the idea that increased economic interdependence among states, especially via trade and investment, is going to increase the costs of conflicts and will generate more peace and stability. And the other broad idea will be neoliberal institutionalism, which has affected a lot the current configuration of ASEAN, which suggests that multilateral frameworks and institutions will reduce transaction costs among states and stabilise their expectations and at the same time providing mutual cooperation, removing the features of an anarchic international system.
So, of course, I would not say that ASEAN countries have been exactly following the textbook version of neoliberal economic reforms or liberalisation because of course ASEAN’s economic security has evolved within the framework of a comprehensive security, which suggests that security should move beyond military factors, but need to embrace political, economic and social factors that are relevant to the survival of states and regimes.
Externally, ASEAN has successfully established a series of preferential trade agreements, and more recently, ASEAN also has signed the RCEP (Regional Comprehensive Economic Partnership), which was considered as a victory of middle power diplomacy.
But the other important thing we may need to keep discussing is that the external and international environment that made ASEAN’s specific strategy viable may no longer exist. Because what we do see currently, or at least over the past few years, is not just a series of trade disputes between countries. And it might not just necessarily be limited to a very short-term abnormality.
So as our contributors in the special issue have been suggesting, what we observe right now is that there is a fine balance and nexus between export-oriented growth, foreign direct investment, regional stability and domestic legitimacy.
This was the fine set of outcomes that ASEAN countries have been enjoying over the past few decades. But given the erosion of the liberal economic order, we need to ask whether this neoliberal-based ASEAN’s aspirations for economic cooperation can keep going.
What we need to think about is ASEAN's way of being integrated in the global supply chain, especially its bifurcated strategy, such as China as [a source of] input, America as a market for export. It is creating a very unique vulnerability for ASEAN countries as a whole, and that it might become the source of strain rather than the fundamental drive for growth. These things should be discussed in the long term, and the short answer is openness itself, or the existing neoliberal aspirations for the link between the economic prosperity and peace might not be a sufficient condition at this time. Thank you.
Denis Hew: Thanks Su-Hyun, I think, Mely, you know, your paper essentially argues for a paradigm shift in the way we approach economic security. And you revisit the developmental state model, which has a complicated history in Southeast Asia, with Singapore as a clear success story, but also cautionary tales in other ASEAN countries like Indonesia and the Philippines.
So what lessons do you draw from those mixed outcomes, and how does your proposed human-centric model avoid repeating those pitfalls?
Mely Caballero-Anthony: Thank you. Yeah, you are right that while we are pushing for a rethinking of the developmental state, the subtext to that argument is really you bring the state back in rather than just allowing the markets to reign freely. And you see that, because as Su-Hyun already mentioned, in light of the economic fragmentation that's happening and all the other things that you put into the mix of the factors that increase economic uncertainty, there's really the tension faced by states in showing that they are holding the line, and the efforts towards promoting integration continues. You know, integration with the global economy and integration within the region. And this is all mentioned in all the blueprints that ASEAN has put forward.
And yet, while you hold the line in ensuring that you promote integration, there's this increasing risk of the worsening impact of hyper-globalisation on your constituents. And because they're buffeted, individuals and groups are buffeted by all of these different pressures on their economic security, it is really left to the state to do something about it.
And as mentioned in the literature, I mean, the reason why states, particularly the developing states, were interventionists was because they needed to ensure that they are not just exposed to or vulnerable to market forces, but the state actually intervenes actively in directing, the industrial transformation of the states for their economic development and resilience.
But in doing so, you assume that the state has autonomy. They call it embedded autonomy, where it can act without having to be captive by various forces. And that was the history and unfortunately, of some states in the region.
So while they were successful in integration and playing a more interventionist role at the domestic level. It did not stop or it did not prevent or secure the state actors from being captive to various interests.
But when a crisis of this magnitude happened with the Asian financial crisis, the state crumbled. So governments were overthrown. Indonesia is really a very instructive case of when the developmental trajectory of the state is not controlled. There are no safeguards to it. Then these things could happen.
And we argue that if that is the model or that is the approach that you want to have, then some of the instability, societal instability that we saw as a result of the severity of the impact of financial/economic crisis, then you protect yourself, insulate yourself from some of the instability that you see in other parts of the world, and which also causes, by the way, some very profound problems, like anti-immigration, for example, which actually also impacts on the way state policies are actually undertaken and could be disadvantageous if you're talking about ensuring that the state, its industries, its companies actually continue to register growth while at the same time being mindful of the sensitivities that workers have when they feel that they are being displaced by foreigners.
I talk about deliberative governance. Working with other sectors, with other actors are components of what we mean by a human-centered or human-centric developmental model for economic security in Southeast Asia.
Denis Hew: Thanks, Mely. The 1997 Asian financial crisis was, in my mind, truly traumatic. And, Barbora, it's described in your paper as the foundational critical juncture for regional financial cooperation.
So, looking back, how transformative was that economic shock? And do you think ASEAN drew the right lessons from that experience?
Barbora Valockova: Thank you. Yes, the Asian financial crisis was a foundational, critical juncture because it set ASEAN and the broader ASEAN+3 grouping on the path of regional financial corporations that did not exist before.
It was the moment when the shock was severe and when the region realised that relying on global institutions alone, in particular the IMF, was problematic. And out of this context came the Chiang Mai Initiative in 2000, a network of bilateral currency swap lines among ASEAN+3 members. And how transformative was it?
I would say that it was transformative in direction, but incremental in depth because it created a new path towards regional reserve pooling and surveillance that later crises, like the global financial crisis of 2008, could build on, and the multilateralisation of Chiang Mai Initiative into the CMIM (Chiang Mai Initiative Multilaterialisation), the gradual increase of the IMF De-linked Portion and the establishment of AMRO (Asean+3 Macroeconomic Research Office), as you mentioned, as a regional surveillance office, all built directly on the lessons of 1997-1998. And did ASEAN draw the right lessons?
I would say yes and no. So the right lesson was that the region needed its own financial safety net and its own surveillance capacity. So in historical institutionalist terms, this crisis set the initial conditions and basic design choices that have structured subsequent reforms towards greater regional autonomy, you could say.
But at the same time, the fact that CMIM has never been activated is often highlighted by critics to question its usefulness. But we argue that non-use does not necessarily imply ineffectiveness, because it can also reflect on improved national buffers and the deterrent or confidence building effect of the mechanism. But still, the fact that it has never been tested operationally means we do not really know how well it would work in a crisis.
Denis Hew: Thanks so much, Barbora. And let me ask you another question.
There’s a broader question lurking behind your paper: is ASEAN's model of crisis-driven, incremental adaptation actually fit for the kind of compounding simultaneous crises the region now faces, where financial shocks, trade disruptions, health emergencies and climate risks can all hit at the same time? A polycrisis essentially, right?
Does this model have a breaking point? What are the constraints?
Barbora Valockova: Thank you, Denis. That's a very valid question. So the crisis-driven incremental approach has allowed ASEAN to expand its economic security toolkit while preserving core norms, and it has produced meaningful gains in resilience, creating more capacity that ASEAN had 20 or 30 years ago.
However, it is true that this model is under increasing strain. There are, at least I would say, three constraints that could become breaking points if crises intensify and compound.
First, resources. Many of ASEAN's crisis mechanisms are underfunded, often relying on voluntary contributions and external partners.
Second, decision making speed. So while consensus and non-interference help ASEAN in meeting coherence, they’re also slow responses and may encourage national rather than collective crisis management during the acute phases of a crisis.
And third, the lack of systematic post-crisis evaluation. So, ASEAN does not yet have robust routine mechanisms for assessing what worked and what did not after each crisis. That means learning is often, we could say, informal and fragmented, which limits ASEAN’s full potential. So you're right that as a crisis becomes more complex and simultaneous, the risk is that incremental layering without adequate funding, faster decision making and systematic learning leads to an increasingly dense but maybe superficial architecture.
And as such, the breaking point, I think, could come if ASEAN faces a multi-dimensional crisis where the existing mechanisms are activated but either proved too small, too slow, or inadequately coordinated to prevent major economic and social impact. Therefore, the model could be reinforced in three ways, namely by investing more resources into existing mechanisms or streamlining decision making, and clearly define emergency situations, and also institutionalising a more rigorous post-crisis review.
Denis Hew: Thanks, Barbora. In the central argument of our paper, Su-Hyun, is that ASEAN's market-driven, state-centric approach to economic security is no longer adequate and needs to be recalibrated or reconceptualised. And we talked about that in our research project that came up especially. And we try to keep that open-ended to explore different ideas. So I'm going to ask you a very tough question.
What would a genuinely recalibrated framework might look like? How realistic is that to expect ASEAN to make that shift?
Su-Hyun Lee: Okay. Denis, I should agree that this is the genuinely hardest question. And to be honest, I don't have a clear answer. But instead of giving you a very tidy and organised answer, I’d like to convey multiple directions. You know, drawing on the key insights of our contributors to the special issue.
So as Mely has already very eloquently described, I would say the shift from a state-centric economic security model to the human-centric one, I think its importance cannot be emphasised further, given what is happening in geopolitics and global and regional economies. Especially ASEAN's traditional way of seeing human security as a byproduct or an automatic flow from economic growth, it might need to be tuned better in aligning with the nuanced changes from the World Bank, the IMF. They are suggesting that human welfare and capacity, they should be pursued as the ultimate goals and values, rather than something that is automatically generated from economic growth or development paths.
And the second direction is to think about how to rebuild institutional capacity or strategic capacity which is beyond making agreement or goodwill. So this is where we can talk about how to mitigate external shocks from geopolitical conflicts or rising protectionism and reducing ASEAN and its member countries’ dependency on all of these structural factors. This will include a set of specific ways such as supply chain diversification, industrial upgrading, or a willingness to make a really difficult political choice to align the technological and regulatory alignment in ASEAN countries, especially in their planning for multiple regional initiatives.
The third part where we can have a more active discussion is the increasing gaps among ASEAN member countries, especially the asymmetries among ASEAN member countries. Singapore, Malaysia, they are far better positioned and show a certain level of resilience, whereas small countries such as Laos and Brunei, they are way more vulnerable.
The last point I would like to highlight, this is coming from your suggestions, in our co-authored paper. We can think about how to effectively implement the new frontiers of ASEAN economic communities and its end goal. It includes digital transformation, sustainability, innovation, resilience and inclusiveness.
And as Barbora and Mely nicely suggested, there is a tendency for institutional layering, adding just a new element, rather than disturbing existing framework. So this is a good thing, basically because it offers ASEAN a certain level of durability and flexibility.
But the fundamental question we need to address at the end is whether ASEAN has a tendency to prioritise procedural continuity rather than structural innovations. The last point I like to quickly highlight is, I think we have very active and constructive intellectual cases and discussion for the recalibrated framework for ASEAN’s economic security. I think many questions still remain about the political will at many different levels, and that's the part that we need to address further. Thank you.
Denis Hew: Good answer. My last question is to Mely. The heart of your proposal is shifting the state's primary objective away from trickle down macroeconomic growth. I think you mentioned that towards directly enhancing human security, what you call freedom from want and freedom from fear. This special issue is an academic exercise.
It's published in a top academic journal, albeit it's policy relevant.
But my question is, what would that shift look like in practice for a typical ASEAN developing country?
Mely Caballero-Anthony: Thank you. On the one hand, Barbora talked about what needs to be done more going beyond the institutional layering. And she talks about not just resources, but also looking at some of the normative practices that ASEAN has been so used to. And it's very difficult to change or to adjust. But the fact of the matter is it has to adjust because the environment is changing.
And one of the adjustments, I think, when it comes to looking at some of the plans that Su-Hyun and you have mentioned, Denis, is that, from the all types of plans that they have, you are now asking the states to look at, or the regional states to look at some frontier areas. And in the frontier areas, you're talking about responding to climate change, responding to the rapid changes in technology like digitalisation. And that goes to the very heart of what we're trying to argue, because as Su-Hyun has talked about, you know, it's not really just human welfare. It's beyond welfare, it is about the protection of individuals and communities. But it is also about empowerment. Allowing them to make choices and to have full agency. And empowerment also gives individuals and communities dignity.
So this is where a more conscious state policy that looks at empowering individuals to be more responsive and to be able to have the skills to respond to the frontier areas where states can do more. When you go back to regional frameworks, at the end of the day, you can have all of these regional frameworks to help states, but it's still domestic economic policies that matter. Because when you aggregate them, then you can have a real regional impact. Otherwise we go back to the old problem of a two-tiered ASEAN. The gap will even increase with the kind of challenges that we face.
So in Barbora’s and Mae’s paper, [we push for] more needs to be done as a region, ensuring that these gaps don't happen. So our states actually try to put more resources into ensuring that their individuals are protected, that they are empowered so that they can have dignity. And for states to also support other states.
This is where the ASEAN Economic Community really matters, because unless you have vibrant domestic economies, I don't think the region can continue to be vibrant in light of the given challenges. So, I think also learning from the others, I talked about some of the policies that Singapore has been putting forward. I mean, this Forward Singapore policy is a very good example of how the state tries to revisit its social compact. And in doing so, it becomes very sensitive to the vulnerable communities. The elderly need certain support. And those that have been displaced as a result of the rapid changes. Providing assistance to ensure that different communities are supported when it comes to learning new skills, and helping students, especially those that have been disadvantaged. Ensuring that no one is left behind.
So if you do that at the national level, you would definitely expect for other countries to help each other so that within the region no country is left behind. So I think that's part and very much the whole argument of a more human-centric, people-centric kind of economic security.
Denis Hew: Thank you, Mely. Excellent points.
Our discussion today underscores that Southeast Asia's economic security landscape is entering a new phase. The region's long standing model, built on openness, regional cooperation and economic integration, has served ASEAN well for decades. But a more fragmented and uncertain global environment is now testing the resilience of that approach.
What emerges from our conversation today is that economic security is no longer only about maintaining open markets. It's also about strengthening resilience, managing structural vulnerabilities, adapting to shifting global value chains, and navigating intensifying geopolitical competition.
At the same time, there's growing recognition that economic security must extend beyond states and markets to include broader societal and human dimensions. How ASEAN recalibrates its approach in the years ahead will be critical in determining whether the region can continue to sustain stability, prosperity and strategic autonomy.
Thank you for joining us for this podcast episode. Stay tuned.