Jakarta. Southeast Asia’s ambitions to become a unified economic powerhouse are being undermined by growing fragmentation, as ASEAN member states increasingly prioritize national interests over regional coordination, speakers at the Jakarta Globe Insight Forum said.

Lili Yan Ing, secretary-general of the International Economic Association, warned that ASEAN continues to suffer from what she described as “shallow integration” as member states struggle to harmonize trade, investment, and industrial policies amid intensifying geopolitical rivalry and supply chain shifts.

“With nearly 690 million people and a combined GDP of more than $4.1 trillion, ASEAN has the potential to become a major market, manufacturing hub, and geopolitical bridge,” Lili said during the forum themed “ASEAN at a Crossroads: Turning Global Turmoil into Regional Opportunity.”

“However, ASEAN still suffers from shallow integration. The core problem is what I call self-inflicted policies,” she added.

According to Lili, intra-ASEAN trade has remained mstagnant at around 21% of total regional trade over the last quarter century as structural barriers persist across Southeast Asia. The figure remains far below the European Union, where intra-bloc trade exceeds 60%.

She pointed to non-tariff measures, complex rules of origin, licensing restrictions, and inconsistent investment regulations as major obstacles preventing deeper regional economic integration.

“The bigger challenge is integration, not competition,” she said. “ASEAN needs to harmonize standards and simplify rules of origin.”

Former Indonesian trade negotiator Iman Pambagyo said ASEAN is currently experiencing one of its weakest periods of regional cohesion.

According to him, the Covid-19 pandemic and escalating global trade wars pushed ASEAN countries toward increasingly nationalistic economic policies, weakening the regional unity that once made ASEAN one of the world’s most respected economic integration projects.

“What we see today is a fragmented ASEAN,” he said. “Still, ASEAN is not finished. There remains strong potential for ASEAN to rise again as a unified group, but that will require strong leadership.”

Iman said ASEAN countries failed to coordinate during recent tariff disputes and supply chain disruptions, with many instead pursuing what he described as “beauty contests” or separate bilateral deals with major powers such as the United States.

“When we talk about leadership in ASEAN, we are really talking about Indonesia. Indonesia has the critical mass to lead ASEAN. Unfortunately, Indonesia was also among the first to pursue separate bilateral deals,” he concluded.

Add as a preferred source on Google +