Regional collaboration could unlock South Asia’s economic potential

South Asia is home to nearly 2 billion people and some of the world’s fastest-growing economies; it faces the dual pressures of surging demand for modern infrastructure and technology, as well as the persistent risks of climate and geopolitical volatility.

Amid these consequential challenges, the recent escalation between India and Pakistan highlights the delicate balance between thriving growth and instability in South Asia.

Putting in abeyance a 60-year water-sharing accord guaranteed by the World Bank has underscored how tensions can distract from economic growth agendas, even as the region’s economies and societies rapidly transform.

Despite these stresses, South Asia’s broader technology and economic ecosystem is gaining momentum. The region holds immense potential, which its people are more than ready to realize.

India’s digital public infrastructure, such as the Unified Payments Interface (UPI), has revolutionized financial inclusion; Bangladesh’s garment sector is leveraging automation and data analytics to move up the value chain.

Pakistan more recently launched its mineral development roadmap on the back of significant resources, including energy transition minerals. At another level, the startup scene is producing fintech and e-commerce platforms that are expanding access to markets and services.

In parallel, climate-focused innovation remains a vital thread, with the region focusing more on its renewable potential and artificial intelligence-powered agricultural solutions, demonstrating how technology can drive sustainability and economic resilience.

Yet, progress remains uneven. Fragmented international policies, regulatory bottlenecks, limited access to long-term finance and persistent geopolitical frictions continue to hold the region back.

In countries such as Pakistan, where digital divides and institutional capacity gaps are being addressed, moving from isolated initiatives to integrated, cross-border cooperation is essential for sustained growth.

The region’s economic ascent will depend not just on national ambition, but on the ability to harness middle-power diplomacy and multilateral platforms to drive technology exchange, investment and shared standards.

While global powers have a considerable role, middle powers have demonstrated that pragmatic partnerships can deliver real-world impact.

Viet Nam’s rapid digital transformation, supported by blended finance and regulatory reforms, shows how aligning public and private capital can reshape an economy. In South-East Asia, countries like Singapore and Indonesia build robust digital economies by investing in infrastructure, skills and innovation ecosystems.

These examples offer a clear playbook for South Asia: countries can access financing and regulatory expertise, risk-sharing mechanisms and proven technology models by working with middle powers that have successfully navigated similar transitions. Strong ideas require strong platforms to move from concept to execution.

The Association of Southeast Asian Nations’ (ASEAN) coordinated approach to regional digital and energy infrastructure, such as the Laos-Thailand-Malaysia-Singapore power integration and cross-border e-commerce agreements, demonstrates how harmonized standards and shared infrastructure can drive billions in investment and enhance collective resilience.

In contrast, South Asia remains fragmented. Despite its potential, the region lacks a cohesive technological and economic integration platform. The older playbooks must be abandoned to create opportunity and progress for people.

Rather than creating regional political tensions, the region needs to collaborate, from digital trade corridors to joint AI and manufacturing research hubs, mirroring ASEAN's successes.

This gap in regional cooperation makes the role of global and transregional forums all the more vital – providing neutral spaces for open dialogue. The Astana International Forum 2025, taking place this month in Kazakhstan, is a prime example: a platform where middle power diplomacy is elevated to address pressing global challenges.

Through its flagship event and think tank event held in the autumn, the Astana forum has emerged as a crucible for dialogue among middle powers and emerging economies across Asia, Africa and the Middle East, offering South Asia both a mirror and a roadmap.

In a world tilting toward multipolarity, the Astana International Forum encourages middle powers to step up as crucial stabilizers, bridge-builders and catalysts for cooperation where great powers stall.

Similarly, the World Economic Forum Annual Meeting of the New Champions, set for 24-26 June 2025, amplifies the voice of innovative and entrepreneurial economies. By gathering leaders from business, government and academia, the summit sheds light on how emerging technologies and agile governance can build resilient, inclusive growth.

For South Asia, which sits at a demographic and digital inflection point, such forums provide inspiration and a playbook for transformation.

A consistent message emerges from these regional and global initiatives: South Asia must pivot from historical rivalries to future-oriented coalitions. The reluctance of nations to collaborate on infrastructure or share data has long stymied regional progress. But middle powers – with their diplomatic flexibility and commitment to multilateralism – can serve as catalysts for change.

By advancing reforms in development financing, promoting technology standards and anchoring regional cooperation, they can help unlock the trillions in investment Asia and specifically South Asia needs by 2030. In doing so, they will shape their futures and contribute meaningfully to global stability and innovation.

For the region and its inhabitants, this means stepping into a narrative of leadership and positioning themselves as proactive regional partners, bridging South Asia to global technology and innovation networks.

The challenge is immense but so is the opportunity. With the support of multilateral diplomacy, middle-power partnerships and platforms such as the Forum and Astana International Forum, South Asia can move from adapting to global trends to actively shaping the future of sustainable, inclusive growth.