What’s happened?

World leaders gathered in the Indonesian capital, Jakarta, on September 5th‑7th for the annual Association of South‑East Asian Nations (ASEAN) Summit and East Asia Summit. The summit made little progress on disputes related to the South China Sea and the humanitarian crisis in Myanmar.

Why does it matter?

The summit achieved significant progress in areas of economic co‑operation, particularly in sectors such as sustainability and digitalisation. Of notable significance was the consensus reached between ASEAN leaders and their East Asian counterparts, including China, South Korea and Japan, to develop an electric vehicle (EV) ecosystem. This agreement will support the EV uptake and supply chain in ASEAN by leveraging the complementary strengths of both regions. While East Asian nations can contribute technological expertise, such as EV battery production, ASEAN nations offer essential resources like nickel, cost‑effective labour and a well‑established infrastructure for vehicle assembly.

The summit failed to make much progress on issues surrounding the South China Sea code of conduct (COC), a legally binding framework to govern engagements within the area. This issue was further complicated by the release of a new territorial map by China a week before the summit, in which it claims sovereignty over larger swathes of area in the South China Sea, as well as the absence of the Chinese president, Xi Jinping, at the ASEAN summit. The map was quickly rejected by Malaysia, India and the Philippines. EIU expects discussions around the COC to be drawn out with limited prospects for a resolution of outstanding disputes, as China has deep economic ties with ASEAN nations, of which the latter intends to preserve.

The summit did not yield advancements in the implementation of the five‑point consensus in Myanmar. However, the ASEAN forum adopted a “troika” approach for ASEAN’s special envoy to Myanmar, wherein the current ASEAN chair will receive support from the previous and upcoming chairs to ensure continuity in engagement with the Myanmar junta. The establishment of this mechanism signals the recognition that the Myanmar conflict will endure over an extended period. We anticipate that this arrangement will be accompanied by a detailed plan for co‑ordinated action among Indonesia, Laos (chairing in 2024) and Malaysia (2025) in due course.

What next?

Indonesia’s focus on its ASEAN chairmanship, which will run till end‑2023, will gradually wane as the country prepares for its presidential election in 2024. Laos will take up the role of ASEAN chairmanship on January 1st 2024, with a continued focus on economic issues, while discussions on geopolitical ones such South China Sea-related disputes will probably be protracted.

The analysis and forecasts featured in this piece can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.