6 questions for ASEAN Secretary General Kao Kim Hourn: ‘Diversity is our strength’
ASEAN Secretary-General Dr. Kao Kim Hourn (left) at the 57th ASEAN Foreign Ministers' Meeting in July 2024. Image: REUTERS/Chalinee Thirasupa
- The Association of Southeast Asian Nations has emerged as a major economic and political bloc.
- The region is home to over 650 million people and has a market size of $2.3 trillion.
- At the Forum's Annual Meeting in Davos, ASEAN Secretary General Kao Kim Hourn detailed the opportunities and challenges facing the region.
The Association of Southeast Asian Nations, commonly known as ASEAN, has emerged as a significant player in the global economy. It's now a critical region for worldwide supply chains, and an important trading bloc for many major economies.
The organization, which was formed in 1967, brings together regional countries to align on economic and security issues, and it's been pursuing economic integration efforts to form a single market. Today, the bloc is home to over 675 million people across 10 countries—Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Viet Nam—and has a market size of $2.3 trillion.
This year, Malaysia holds the ASEAN chairmanship—which rotates alphabetically on annual basis. The World Economic Forum and the Malaysian government agreed to collaborate during the chairmanship term on bringing public and private sector leaders in the region together around economic opportunities.
Several ASEAN leaders and heads of state are attending the World Economic Forum’s 54th Annual Meeting in Davos, Switzerland, including ASEAN Secretary General Kao Kim Hourn. During the event, we spoke to Dr. Kao about the opportunities and challenges facing the region.
Here’s what he had to say.
What strengths help facilitate growth in ASEAN?
There are a number of factors that have contributed to the growth of the economy of ASEAN. Certainly peace, stability and security. People look at a region with these qualities and are encouraged to invest.
Secondly, ASEAN has been able to consolidate its market and become a single market production base with 677 million people. So the market size is significant in that regard because we also have a growing middle class. The other factor would be the market access that ASEAN has with its partners. At the moment, we have free trade agreements with China, Japan, Korea, Australia, New Zealand, India and Hong Kong. At the same time, we have the Regional Comprehensive Economic Partnership, which comprises 15 economies. This partnership will constitute about 30% of the world population.
ASEAN has been able to bring out the new drivers that we need. Of course, from a circular economy to the green economy. Now, we're focused on the blue economy and the digital economy.
How has unity in the region helped fuel growth and development?
ASEAN is a very diverse region with ten countries. And we are going through the latter rounds of enlargement, so we expect to be 11 members soon.
Diversity is our strength; it is not a challenge. Unity is the key. It is how we unite our common purposes and ASEAN, of course, has the slogan “unity in diversity.” To ensure unity, we adopt consensus-based decision making. This is a strength of ASEAN because once we reach a consensus, it means it is unbreakable. Countries will then implement the agreed-upon agreement and I think this power and convergence is essential in bringing together unity and solidarity.
How is the World Economic Forum advancing the digital economy in ASEAN countries?
How are young people impacting economic growth?
Of the 677 million people in ASEAN, the youth accounts for one third, so the workforce is young. This is important in particular because we are surrounded by countries that have aging populations.
Young people also help enhance digitalization. Internet penetration is very high at around 80%; 460 million of our citizens now are able to use the internet, which is important for our digital economy. Currently, we are negotiating the ASEAN Digital Economy Framework Agreement. It's the most ambitious, region-wide, legally-binding agreement and we want to maximize this based on current studies that show we’d be able to increase our digital economy to up to $2 trillion by 2030. We are working very hard at this at the moment, and we expect to conclude this agreement this year.
What are the obstacles to growth in ASEAN?
There are some challenges. Firstly, of course, we need to bring peace and stability to Myanmar. This is something we’re working on through the five-point consensus. We want to implement this in full to help Myanmar end this crisis.
At the same time, we have to continue to harmonize our own rules and regulations within the region. For example, we want to promote intra-region trade and investment. We have to make sure we become a truly single market. That's why we hope within this year we will have the ASEAN Trade in Goods Agreement. At the same time, of course, we have to continue to invest in human resources and capacity building for people. We have to reskill and upskill our people, so that they have all the necessary digital skills—so they can take advantage of the future economy.
In addition to that, I want to say that we have to continue to manage the ongoing geopolitical tensions and geo-economic competition. At the moment, we have 11 national partners, including the United States, China and the EU. These are the key players and we have to make sure that we work with all of them.
Are you concerned about a rise in protectionist policies globally?
Any unilateral or protectionist policy will disrupt the open, rule-based multilateral system that we have. ASEAN is a strong proponent of an open, rule-based trading system.
We all stand to benefit from open trade through win-win cooperation. So we will continue to closely work with our partners through the various free trade agreements. But at the same time, we will work with other regions. For example, ASEAN and South America. Countries like Chile, Peru, and others that have expressed a lot of interest in working with us. In fact, Chile is a country that has expressed interest in applying to become a part of the Regional Comprehensive Economic Partnership. So I think that door is open and we have to really work in the spirit of cooperation in that regard.
What opportunities are emerging for ASEAN as the global economy evolves?
Supply chains have been shifting to ASEAN, and we are taking advantage of this opportunity to work with not only our partners, but also the companies that are investing in us. Right now, we have companies from China, Korea, Japan and others who are investing in ASEAN. Last year, in fact, during the special summit between ASEAN and Australia, Australia reaffirmed that they will invest and do more business in ASEAN.
So, I think we are benefiting from the global shift. Of course, what's important is that we have to be able to maintain our attractiveness as the destination for funding investment. In 2023, in fact, we attracted $234 billion of foreign direct investment. And I think this is something that will continue, as we maintain our attractiveness.
This question-and-answer has been edited for clarity.
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