This is less of an option than a necessity. Lockdowns and border closures have had heavy impacts – not only to the overall economy but on so many human lives and livelihoods. Opening up will be necessary for growth and for hope for better prospects.

Yet for the longer term, governments must also give attention not only to economic but also human, political and sustainability shifts that hold implications for ASEAN’s prospects. As we detailed in our 2017 ASEAN publication, Global Megatrends: Implications for ASEAN Economic Community, some of these started prior to the pandemic, but have accelerated in the year. Unless governments fully address them, the region might face diminished prospects going forward. On the other hand, if preparations can be accelerated, some of these can turn to positive advantages.

The first concerns are in commercial trends and patterns of globalization. Our region is buoyed by exports to other markets but this will need to consider the reconfiguration of global value chains. Even before the pandemic, investors have started to look at ways to diversify their supply chains, starting with cost in mind but increasingly – especially since the pandemic – to also consider supply chain resilience and sustainability. Notwithstanding the onshoring and re-shoring trends, there is a renewed opportunity for regional value chains and alternative production hubs.

ASEAN must therefore increase its own connectivity and competitiveness. This is not only a defensive response but will yield results into the medium term. The key is that this needs to be complemented by investment facilitation, critical infrastructure, enabling business environment, skilled workforce, and ease of digital technology adoption. An early and effective implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) will also strengthen the region’s position.

The next challenge is in digitalization. This has underpinned economic and social survival for many through the pandemic and will be even more critical for recovery. ASEAN has started a number of initiatives which more recently include its Digital Master Plan 2025, Agreement on Electronic Commerce and its implementation work plan, the Consolidated Strategy on the Fourth Industrial Revolution, and the Bandar Seri Begawan Roadmap as well as specific initiatives such as the ASEAN Data Management Framework and ASEAN Model Contractual Clauses for Cross Border Data Flows.

These may seem an ASEAN documentation overload but are necessary to align the diverse policies among its 10 members, and momentum should be maintained. The ASEAN Digital Economy Framework Agreement (DEFA) referred to in the Bandar Seri Begawan Roadmap can significantly elevate the overall aim of making ASEAN a more integrated economic community that befits the 21^st century reality.

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