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ASEAN braces for risks of 'deglobalization'
ASEAN member states have vowed to buttress regional resiliency by increasing trade within the bloc while attracting more infrastructure and green financing.
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Delegates from ASEAN member states pose for a “family photo” on Aug. 25, 2023, during the second ASEAN Finance Ministers’ and Central Bank Governors’ Meeting in Jakarta. (-/Finance Ministry)
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SEAN member states have vowed to increase trade among themselves while attracting more infrastructure and green financing to protect the region from a global economic slowdown and rising geopolitical risks.
At the opening session of the ASEAN Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM) on Friday, Finance Minister Sri Mulyani Indrawati said geopolitical tension was causing uncertainty and could worsen, pointing out that all ASEAN member states felt the tension between the United States and China.
"This could cause the world to become even more fragmented. The issue or term 'deglobalization’ is, in fact, becoming ever more frequently mentioned by policymakers and economists," she added.
Addressing a press conference afterward, the finance minister also noted that slower-than-expected growth in China and downside risks to the US economy next year might affect exports from the region.
"Thus, the focus of this meeting was [about] how ASEAN could create resiliency," she said.
The second AFMGM under Indonesia's 2023 ASEAN presidency noted that the region continued to be a "bright spot" amid subdued global growth, underpinned by resilient domestic demand and continuing recovery in the tourism industry.
It stressed that ASEAN member states needed to remain vigilant, however, given the slightly lower growth outlook of 4.5 percent for this year due to weakening export demand. Inflation rates in several member states were also expected to remain high due to elevated input prices, increased demand for services and continued currency pressures.
