Authors: Armando Gomes and Dr. Atin Prabandari*
The World Forces ASEAN to Think Geoeconomically
In early March 2026, it was time for ASEAN to wake up to the reality that wars in distant lands could no longer be left entirely to diplomats. As the conflict in the Middle East continued unabated, ASEAN Foreign Ministers (FMs) expressed concern not only for peace but also for ASEAN’s economic interests. This prompted an emergency AEM meeting and a statement from the ASEAN economic ministers (AEM).
Global oil prices, combined with restrictions on sea lanes and higher transportation and insurance costs, are already making life difficult for several major export-oriented economies in Southeast Asia. Manila admits it will impact inflation and employment.
Half of ASEAN’s crude oil comes from the Middle East, and any conflict in Hormuz would disrupt industrial production, trade flows, and the fiscal stability of ASEAN member states. This represents a structural vulnerability. Geoeconomics is not an abstract framework for ASEAN, as wars outside the region significantly impact energy security, supply chains, prices, and the region’s strategic actions.
ASEAN has begun to act
ASEAN has begun responding to global geopolitical changes. At the 46th ASEAN Summit in Kuala Lumpur in May 2025, ASEAN leaders officially welcomed the establishment of the ASEAN Geoeconomic Task Force (AGTF) as a “specialized, ad hoc, high-level advisory body” for organized policy advice based on strategic studies, to address the impact of threats to the region from global political and economic developments. Geoeconomics is no longer treated as an abstract concept to be discussed, but as a policy issue serious enough to require a dedicated ASEAN mechanism within the region’s decision-making architecture.
This is not merely symbolic. The ASEAN Geoeconomic Report 2025 paints a very different picture of Southeast Asia. The region must take a greater role in addressing significant global economic developments and cannot remain a passive recipient of them.
In July 2025, the Joint Communiqué of the 58th ASEAN Foreign Ministers’ Meeting (AMM) will reference the AGTF’s briefing on geoeconomic trends in the region as well as the AGTF’s initial views on the path forward to deepening regional economic integration and advancing ASEAN’s centrality in the region. Thus, geoeconomics has moved from being a term on the fringes of ASEAN discussions on regional economic policy to being at its very core.
Shifting Discourse to Institutional Pressure
The geoeconomic turn of ASEAN has moved from mere rhetoric to a powerful force. On 14 March, the Philippines, as the current ASEAN Chair, urged its ASEAN economic ministers to elevate the AGTF into what would be called the “ASEAN Geoeconomic Group”. The region needs a more institutionalised mechanism to monitor global economic developments, thereby helping the bloc be more resilient to external economic volatility and better plan economic policy responses. This proposal is important because it underscores that the geoeconomic concept is no longer seen as a short-term measure to address the current global health crisis, but is here to stay as the region moves into a more tumultuous and competitive international environment.
In retrospect, the shift in calculus was underscored a day earlier whenAEM issued a statement linking the instability in the global economy to market-oriented economic policies, supply chain resilience, external economic linkages, the review of the ASEAN Trade in Goods Agreement (ATIGA), and negotiating the Digital Economy Framework Agreement (DEFA). Political neutrality is no longer sufficient for ASEAN to contend with the era of geoeconomics. The regional grouping must now grapple with the challenges of trade fragmentation, unilateral tariff increases imposed by major economies, volatile oil prices, and divergent digital regulatory frameworks for the information and communication technology sector. Geoeconomics is becoming a critical factor in helping ASEAN build resilience in a fragmented global economy and, at the same time, gain the capability to influence developments in this new and complex era.
Collective Capacity Becomes an Issue
The problem in ASEAN is no longer about vision, but capacity. The basic language and terminology, such as resilience, coordination, integration, and global linkages, have been acquired, and terms like a fragmented world increasingly appear in regional policy statements. But again, diagnosing a problem is not the same as curing it. The AGTF is still only a high-level advisory body and has not been transformed into a standing committee with real weight and mandate. The Task Force still performs the role of coming up with strategic research, and recommendations to the various ASEAN processes, but member states are still not forced to follow ASEAN sector wise recommendations, thus the problem in ASEAN today is that it has increasingly mastered the language of identifying regional geoeconomic challenges, but has yet to acquire the capacity to impose regional discipline to respond to these new challenges.
The clearest indication emerged in March 2026: despite ministers’ pledges to ensure smooth trade during the Middle East conflict, ASEAN was unable to secure definitive assurances from its members that they would agree to remove tariffs and other export restrictions imposed in the name of national security. This revealed ASEAN’s real constraints: not a lack of strategic awareness, but the persistence of national reflexes that continue to override regional commitments when pressure mounts.
Centrality and Geoeconomics
When viewed through a geoeconomic prism, the implications of this shift are profound. Historically, centrality has been framed in the context of ASEAN’s role in preserving political space between larger powers, but by 2026, this definition appears outdated. With the region experiencing real-time disruptions caused by supply-chain volatility, energy insecurity, technological wars, tariffs, and non-tariff barriers, members will no longer endorse centrality based solely on a country’s diplomatic prowess to moderate others’ tensions. Indeed, with the ASEAN Economic Community Strategic Plan 2026–2030 scheduled for adoption in August 2026, what is at stake for ASEAN’s Centrality and relevance going forward is the definition of a more pragmatic economic agenda. Essentially ASEAN centrality is going to have to be about much more than just diplomacy, and the defining test for ASEAN’s future relevance may be whether it can deliver higher levels of economic connectivity — through trade, investment, regulatory governance, financial linkages, transportation networks, and sustainable production and supply networks — in a manner that secures higher economic rewards and greater benefits of membership for its individual members.
The logic that underpins the AGTF and the conversations that ensued also applies to this development. When the 58th ASEAN Foreign Ministers’ Meeting referred to “AGTF recommendations for realizing the goal of deepening regional economic integration and effective ASEAN centrality,” it offered a glimpse of the changing framework underway. The meaning of centrality extends beyond the basic concept of convening power and arguably shifts to ASEAN’s capacity to protect its member states from global and regional economic impacts, facilitate compliance with global and national rules, and act collectively to mitigate the effects of growing economic fragmentation. If ASEAN cannot mitigate the economic costs of globalization and fragmentation for its member states, it will lose strategic weight in the region and globally.
Conclusion
ASEAN has begun its geoeconomic transformation, but it will not become a true geoeconomic body until it transforms joint analysis into more enduring and robust institutions, loose consultation into more effective coordination, and declarative solidarity into more systematic and collective action. These principles were clear in the 46th ASEAN Summit statement, the ASEAN Economic Community Strategic Plan 2026–2030, and even clearer in the joint statement of ASEAN economic ministers in March 2026, when for the first time the bloc “recognized that in today’s rapidly changing and dynamic global environment, intra-ASEAN trade integration, regional connectivity, the resilience of our supply chains, and our ability to collectively manage and mitigate the impact of external economic shocks are all key elements underlying our region’s unity, peace, stability, prosperity, and development. This, in essence, shifts ASEAN from merely ‘strengthening diplomacy’ to a much more meaningful concept for regional functioning.
The real question for ASEAN is whether its members are willing to accept the higher political costs that accompany engagement in geoeconomic affairs, which means being ready to make concrete commitments to regional economic cooperation, to pursue greater policy convergence, and to restrain impulsive national reactions when crises erupt. Otherwise, as has happened before, ASEAN’s geoeconomic lexicon will once again evolve at a pace far greater than its economic capabilities. This means that the region has not fully fulfilled the expectations of the geoeconomic transition it has initiated.
*Dr. Atin Prabandari is an Assistant Professor of International Relations at Universitas Gadjah Mada and a research fellow at the ASEAN Studies Center and Southeast Asia Social Studies Center. Her work explores how emotions shape humanitarian practices across cultures, with a focus on refugees and forced migration. She is also active in regional policy dialogues on refugee management, blending academic insight with hands-on experience in international affairs.
