ASEAN is a future driver of global growth. Here's how to unleash it

With its young population, vibrant cities and fast-growing economies, South-East Asia is drawing attention from investors and innovators alike. By 2030, ASEAN (Association of Southeast Asian Nations) is projected to become the world’s fourth-largest economy.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam. By 2030, that grouping of countries’ digital economy is expected to more than double to $560 billion, driving jobs and innovation in the region. But positive trendlines alone are not enough. Against the backdrop of leadership challenges and geopolitical shifts, long-term success requires a clear strategy, collaboration in the public and private sectors, and a shared vision.

Here is one such vision that we believe everyone should be able to agree on and work towards together: In this era of technological transformation and economic transition, we need to work harder than ever to ensure a deep and broad foundation for economic growth.

Scale is required for any successful venture to remain profitable and sustainable over time. Building an inclusive economy – where more people contribute their skills and connect to the benefits of growth – is how we create the scale necessary for quality jobs, cutting-edge innovation and sustainable economic success on a global level.

It is how we will ensure that growth endures and delivers gains for decades to come.

South-East Asia, with its young, entrepreneurial and dynamic population, can be the proving ground that demonstrates the power of inclusive growth. Here, leapfrogging older technologies is not unusual, allowing the region to adopt solutions built for the realities of today and tomorrow.

In Malaysia, for example, local AI company YTL AI Labs has recently developed ILMU, a large language model built on the country’s national language, Bahasa Malaysia. Fully developed, owned and operated in Malaysia, it can deliver ChatGPT-like capabilities for native Malay speakers, with potential applications across business, education and government.

At the same time, targeted investment in areas such as harmonizing regulations, reducing non-tariff barriers and boosting intra-ASEAN trade could further amplify the region’s role as a global growth engine.

One example is the proposed ASEAN Business Entity recognition for companies, as a practical and high-impact way forward to enhance regional integration and economic dynamism.

When much of the global political momentum is swinging towards greater fragmentation and disconnection, ASEAN economies stand to benefit the most from increasing cooperation and coordination around key initiatives that would benefit everyone.

Consider the impact of investing in strengthening small business development – especially micro, small and medium-sized enterprises (MSMEs). MSMEs account for more than 97% of all businesses in South-East Asia, 85% of all employment, and drive a significant chunk of the economy, including 40% of all gross domestic product in Malaysia.

MSMEs are also a significant driver of mobility and middle-class expansion. By 2035, seven of the 10 ASEAN countries are projected to be predominantly middle class, leading to a synergistic effect between MSME growth, job creation and consumer demand.

Yet most MSMEs still lack the tools to scale: financing, mentorship, network building and more. This is where the business community, working alongside ASEAN institutions and governments, can step up and make a difference.

Access to capital is critical. But without a digital identity or proven credit history, many MSMEs struggle to secure loans, with up to 60% of those in South-East Asia reporting difficulty in obtaining financing.

To meet this need, the Mastercard Impact Fund pledged $5 million in 2024 to unlock up to $1 billion in Asian Development Bank financing for MSMEs. This shows how relatively small commitments from the private sector can de-risk lending and spur a cycle of credit-building.

Digitalization presents another big opportunity. Digital payments across South-East Asia are expected to exceed $1 trillion this year. By accepting QR codes, e-wallets, or contactless payments, MSMEs can reach more customers, increase sales, create quality jobs and stay competitive.

However, greater connectivity also brings greater risk. MSMEs, like large corporations, require cyber security protections and digital literacy to guard against scams, but lack the resources.

Cyber criminals are quick to exploit loopholes and blind spots that occur when systems are not compatible. This is why public and private sector leaders have a responsibility to work together to strengthen the digital environment against cyber attacks, and help MSMEs gain the skills and tools they need to protect themselves.

These are attainable goals – and ones that Mastercard and the ASEAN-Business Advisory Council (ASEAN-BAC) are working together to advance, helping the region achieve its rightful place as a global economic trailblazer.

ASEAN can and should serve as a fulcrum that helps direct the future of the global economy towards growth that is not only resilient but sustainable and inclusive.

To make this future a reality, we need the business community on the front lines of inclusive economic growth, working right alongside governments to strengthen the enabling environment for everyone. Together, we can create a future that delivers growth not just for now – but growth for good.