Jakarta. Indonesia is encouraging ASEAN member countries to strengthen cooperation to escape the middle-income trap. Deputy Finance Minister Thomas Djiwandono said cross-sector collaboration will enhance the overall welfare and resilience of ASEAN communities. 

“In the coming decades, most ASEAN countries will need to escape the middle-income trap, which can only be achieved through cross-country collaboration and cross-sector innovation,” Thomas said during the Launching and First Meeting of the ASEAN Treasury Forum (ATF) 2024 at The Stones Legian, Bali, on Thursday.

He stressed the importance of a consensus-based framework to help ASEAN navigate increasingly fragmented geopolitical conditions. In today’s globalized world, nations can collaborate to address these geopolitical challenges.

“In addition, countries are beginning to impose restrictions on who they will conduct business with. This will weaken supply chains, disrupt the flow of money and commodities, and hinder services,” he added.

One key area for strengthened cooperation is food security, as supply chain disruptions can exacerbate global problems that threaten it.

“Measures to improve food security include boosting production through sustainable agricultural technologies such as precision agriculture and smart irrigation, and developing climate-resilient crop varieties,” he explained.

Thomas also highlighted other challenges, including inflationary pressures and geopolitical tensions, which create unavoidable risks and uncertainties. He urged ASEAN members to improve their fiscal risk management strategies to mitigate these risks better and ensure financial resilience.

“Strengthening regional collaboration will allow us to address these risks collectively, driving innovation and sustainable solutions that benefit all ASEAN members,” he said.

He concluded by emphasizing the need for a unified approach to tackle complex and interrelated challenges, which can be achieved through effective collaboration. Pooling knowledge, resources, and expertise will help develop innovative, sustainable solutions. This requires concerted efforts to build and strengthen partnerships among countries, institutions, and communities across ASEAN.

“We can leverage our collective power to address these issues head-on by fostering dialogue and cooperation,” Thomas said.

In its July report, economic think tank AMRO lowered its 2024 GDP growth forecast for ASEAN+3 from 4.5 percent to 4.4 percent. The forecast was further reduced to 4.2 percent in AMRO's latest report in October, attributed to economic adjustments in China and Vietnam. Despite this, AMRO remains optimistic about ASEAN+3’s expansion in 2025, raising its forecast by 0.1 percentage points.