We gather today against the convergence of many challenges. The “great acceleration” that we are experiencing means everything in the world has sped up – people, cities, trade, energy use, and technology.^[1] These fast changes put pressure on nature, society and the economy, making the world feel tense and unstable. These forces are pushing the planet, markets and societies to change faster than we can fully adapt.

These forces are formidable enough in isolation – but the world we live in today is highly interconnected. These complex issues interact and amplify with another, bringing the term “polycrisis” to mind – a situation when many big problems hit at the same time and make each other worse.^[2] Economic shocks, climate events, geopolitical tensions, and social stress all link together. Because they stack up, they are harder to fix and make the world feel more fragile. Some of these have even morphed into “wicked problems”: multi-dimensional, deeply rooted, and more resistant to conventional solutions.^[3]

Navigating this demands imagination, stronger leadership, and closer partnerships. And yet, the world now faces new challenges - geoeconomic fragmentation, rising polarisation, and eroding public trust. These challenges are not unique; ASEAN stands at the crossroad with others.

The centre of the global economy is inching east, with our nations playing an increasingly important role. Despite global financial, economic and health crises, ASEAN’s GDP growth averaged at 4.8% over the past two decades^[4] – commendably higher than the global average. Already the fifth-largest economy, the region’s growth will continue to benefit from its demographic dividends, the rise of the middle-class consumer and its strategic position in the global supply chain.^[5]

Distinguished guests,

While ASEAN’s potential is undeniable, much of it remains untapped, and we face our very own set of “wicked problems”. 

First, the climate emergency is pressing – ASEAN is climate-vulnerable. Rising sea levels threaten our coastlines, extreme weather disrupts lives and livelihoods, and biodiversity losses affects our ecosystems. Against this, access to climate finance and adaptation resources remains uneven, leaving many without the tools to respond, let alone recover. Fragmented regulations, outdated infrastructure and the dominance of coal in our energy mix also stand in the way of sustainability in the region. These can affect the foundations of ASEAN’s decades long stability.

Second, the promise of ASEAN’s digital economy remains uneven, constrained by fragmentation. Urban-rural infrastructure gaps continue to limit access while disparities in digital literacy further widens the divide. These leave many unable to meaningfully participate in the digital economy. Divergent regulatory frameworks also hinders seamless integration and could lead to splintered digital ecosystems that are inefficient and fraught with exclusion risks.

Third, while our economies are converging at the macro level, the realities are – our people might tell a different story. From the highlands of northern Laos to the coastal villages of Timor-Leste, development gaps persist. Not just in income, but in access to education, healthcare, and opportunities. These disparities are not only economic – they are structural and institutional. Left unaddressed, they could turn our shared progress into a glum future in which some surge ahead, while others are left behind.

While these challenges may seem insurmountable, they have not stifled us. If any, the challenges motivated us to move faster and more strategically. As a region, we are responding with resolve.

In our sustainability efforts, ASEAN is driving the momentum in green finance. In the second quarter of 2025, ASEAN+3’s outstanding sustainable bonds reached nearly USD955 billion, accounting for 18% of the global total.^[6] This is a strong signal that capital is beginning to flow where it is needed and that ASEAN is shaping the future of global sustainable finance. There are abundant opportunities – what we need now is to deliver investable, scalable solutions for the world.

Malaysia is leading the charge in this area. With a well-established framework for Islamic green sukuk and the launch of our National Energy Transition Roadmap, we are building the financial architecture to mobilise private capital at scale.^[7] Islamic finance offers a distinct advantage, grounded in risk-sharing, asset-backing, and ethical alignment. It offers a solution to not only finance Malaysia’s domestic energy transition, but also regional initiatives – including the ASEAN Power Grid (APG).

This initiative (APG) requires that more than USD750 billion investments to build the energy infrastructure and power generation capacity in the region. To this end, the ASEAN Power Grid Financing Framework plays a key role – a regional initiative designed to unlock capital, reduce investment risk, and accelerate the development of cross-border energy systems.^[8]

On the digital front, ASEAN is building the architecture for a connected future. One area that stands out is cross-border QR payments. There is a tangible change in how our people and businesses can connect across borders now. Not only it is cheaper, but it is also more convenient and has greater security. In the first half of 2025 alone, ASEAN cross-border QR payments surged, reaching 12.9 million transactions.^[9] This sets the stage for further expansion, with additional cross-country linkages being explored and implemented to deepen regional connectivity.

Building on this, initiatives like Project Nexus – co-led by Malaysia and regional partners – are pushing the boundaries of digital finance. By linking instant payment systems across borders, Project Nexus enables near-instant retail transactions. Beyond speed and efficiency, it can also advance financial inclusion. It allows workers, micro-entrepreneurs, and underserved communities to meaningfully participate in an integrated economy without the need for complex banking arrangements – all enabled by digital finance. Beyond the digital payments, the financial sector is stepping up efforts to promote local currency settlements and deeper banking and capital market connectivity to support businesses across the region realise their potential.

At the policy level, the ASEAN Digital Economy Framework Agreement (DEFA) represents a bold step forward. By harmonising rules on data governance, e-payments, digital identity, and cybersecurity, DEFA is setting the stage for a borderless digital economy – one that is secure, scalable, and inclusive by design.^[10] These efforts are unlocking opportunities for millions to access and benefit from the digital economy.

ASEAN has also long recognised that deliberate action is key to advance shared prosperity – it cannot be left to chance. In this area, the Initiative for ASEAN Integration (IAI) continues to play a vital role in narrowing development gaps across the region. With over 25 projects underway, the goal is to strengthen capacity, enhance infrastructure, and promote policy coherence in areas most needed.^[11]

Crucially, inclusive growth must be powered by equitable opportunities, and our people must be equipped with the skills to seize these opportunities. Under the ASEAN Year of Skills 2025, we are stepping up efforts to close skills gaps and prepare our workforce for the future. Regional platforms, such as the ASEAN Human Capital Development Investment Symposium and Malaysia’s National Training Week, provided access for all ASEAN citizens to more than 65,000 free courses.^[12][13] The message is clear: “Inclusivity in ASEAN is not just about bridging income gaps; it’s about investing in our people”.

Ladies and gentlemen,

The region is witnessing the rise of geopolitical tensions globally. Being a trading region, this is both a warning and a call to action: we must shape our own destiny, else others will decide our fate. That is why the ASEAN Geoeconomic Task Force was established with a clear mission: ASEAN must plan strategically and respond collectively.

In the short term, ASEAN must address the immediate fallout from the rise in tariffs. This includes defining rules of origin more clearly, closing transhipment loopholes and develop trade diversion safeguards. The aim is to facilitate genuine trade and manage excess capacity from this region and its vicinity.^[14] 

Over the longer term, the priority is to deepen regional integration and uphold pragmatic multilateralism. This means accelerating the implementation of various trade agreements, such as the upgraded ASEAN Trade in Goods Agreement (ATIGA)^[15], the Regional Comprehensive Economic Partnership (RCEP)^[16] and the soon-to-be completed DEFA. These agreements can help ASEAN elevate intra-regional sourcing, reduce cost of doing business and strengthen intra-regional trade and investment.

Diversifying and strengthening trade partnerships – particularly with other advanced and emerging economies – is not just a hedge against uncertainty. It is a strategic imperative.

ASEAN’s ties with China, Japan, and Korea goes beyond its culture and values, but also in the value chains that span across industries. There is still room for us to strengthen our economic ties. Institutions like the Asian Infrastructure Investment Bank (AIIB) have committed up to USD50 billion in climate-related projects across ASEAN^[17], while Japan’s ASEAN Integrated Fund (JAIF) has provided over USD894 million in wide-ranging grants for economic integration, disaster management, and human capital development since 2006.^[18] These lay the groundwork for closer cooperation. ASEAN must be prepared to leverage on these opportunities to fully realise mutual benefits.

Beyond Asia, deepening engagement with the EU and Latin America offers a clear path to diversify partnerships and unlock new growth. ASEAN–EU trade already exceeds USD200 billion annually, making ASEAN the EU’s third-largest trading partner outside Europe. While trade with Latin America is smaller – around USD32 billion – there is genuine potential. By advancing high-standard, mutually recognised trade agreements with blocs like the MERCOSUR^[19] and the Pacific Alliance, ASEAN can position itself as a credible, competitive global partner.

Distinguished guests,

As Malaysia concludes its ASEAN Chairmanship in 2025, we have shown the world that the region can rise to the occasion. That we can act as one. But our work is far from done.

The “wicked problems” in ASEAN are pressing but they are not insurmountable. With resolve, agility and collaboration, we can overcome them together. The task at hand is to realise ASEAN’s potential, rooted in its strength and recognising global realities. ASEAN has the chance to redefine norms and shape standards for the future, becoming a constructive voice in the global arena.

This is not the responsibility of governments and regulators alone. While policymakers provide vision and direction, industries must invest in these strategies with a long-term view and academia must drive evidence-based discourse. Platforms like today’s FAEA conference embody that spirit—bringing together scholars, practitioners, and thought leaders to build the future together. I hope the next two days will be filled with interesting conversations, new ideas and greater resolve to push ASEAN forward. Together, we can navigate complexity and build a future that is resilient, inclusive, and progressive.

Thank you.

[1]  International Geosphere-Biosphere Programme (2015). The Great Acceleration.  https://futureearth.org/2015/01/16/the-great-acceleration/

[2]  World Economics Forum (2023). Global Risks Report 2023. https://www.weforum.org/publications/global-risks-report-2023/

[3] OECD (2017). Systems Approaches to Public Sector Challenges. https://www.oecd.org/content/dam/oecd/en/publications/reports/2017/08/systems-approaches-to-public-sector-challenges_g1g7f844/9789264279865-en.pdf.

[4] ASEANstats. (2025, October 16). ASEAN Statistical Highlights 2025. ASEANstats Official Web Portal. https://www.aseanstats.org/publication/ash2025/

[5] World Bank (2024). GDP (current US$). World Development Indicators. https://data.worldbank.org/indicator/NY.GDP.MKTP.CD

[6] Asian Development Bank (2025) Asia Bond Monitor – September 2025. Mandaluyong City, Philippines: Asian Development Bank. https://www.adb.org/publications/asia-bond-monitor-september-2025

[7] Ministry of Economy, Malaysia (2024) National Energy Transition Roadmap (NETR). Presented at the Conference on Government Assistance for Circular and Low-Carbon Economy, organised by Malaysian Plastics Manufacturers Association, 26 June 2024. https://mpma.org.my/upload/2024/04_National_Energy_Transition_Roadmap_NETR_MOE.pdf

[8] ASEAN Secretariat (2024) ASEAN Secretariat’s Briefing on Energy. United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). https://www.unescap.org/sites/default/d8files/event-documents/ASEAN%20Secretariat%E2%80%99s%20Briefing%20on%20Energy_Final.pdf

[9] WC-PSS (2025) Survey on Cross-Border Payment Linkage in ASEAN. Confidential internal document, conducted August 2025. Not publicly available.

[10] ASEAN Secretariat (2023) Digital Economy Framework Agreement (DEFA): ASEAN to leap forward its digital economy and unlock USD2 Tn by 2030. ASEAN. https://asean.org/asean-defa-study-projects-digital-economy-leap-to-us2tn-by-2030/

[11] ASEAN Secretariat (2025) Initiative for ASEAN Integration & Narrowing Development Gap (IAI & NDG). ASEAN.  https://asean.org/our-communities/initiative-for-asean-integration-narrowing-development-gap-iai-ndg/

[12] ASEAN Secretariat (2017) ASEAN Inclusive Business Framework. ASEAN. https://asean.org/wp-content/uploads/2021/09/ASEAN-Inclusive-Business-Framework.pdf

[13] Human Resource Development Corporation (HRD Corp) (2025) National Training Week Malaysia.  https://nationaltrainingweek.gov.my/

[14] MSN (2024) ‘ASEAN’s moment of truth’. MSN News, 31 July.  https://www.msn.com/en-ph/money/economy/asean-s-moment-of-truth/ar-AA1Q0un3?ocid=BingNewsSerp

[15] Bernama (2025) Upgraded ATIGA to Boost Goods Concession, Achieving 99 Pct Trade Openness – Satvinder.  https://asean.bernama.com/news.php?id=2482897

[16] ASEAN Secretariat (2025) Joint Leaders’ Statement on the Regional Comprehensive Economic Partnership (RCEP). 5th RCEP Summit, Kuala Lumpur, Malaysia, 27 October 2025.  https://asean.org/wp-content/uploads/2025/10/Joint-Leaders-Statement-for-the-5th-RCEP-Summit-ADOPTED.pdf

[17] South China Morning Post (2024) ‘Asian infrastructure bank AIIB’s president looks to fund climate-linked projects in Asean’, South China Morning Post, 31 July.  https://www.scmp.com/business/article/3272564/asian-infrastructure-bank-aiibs-president-looks-fund-climate-linked-projects-asean

[18] Mission of Japan to ASEAN (2025) Official website of the Mission of Japan to ASEAN.  https://www.asean.emb-japan.go.jp/itprtop_en/index.html

[19] ASEAN Secretariat (2021) Overview of ASEAN-MERCOSUR Relations as of 21 July 2021. https://asean.org/wp-content/uploads/Overview-of-ASEAN-MERCOSUR-Relations-as-of-21-July-2021.pdf