By Dr Intan Murnira Ramli, Senior Policy Fellow, and Ardhana Tahriza Syarif, Research Associate: Calm seas never make skilled sailors; and the early months of 2025 have proven to be anything but calm. Geopolitical tensions in the Indo-Pacific – once thought to have receded following the COVID-19 pandemic – have intensified to unprecedented levels. Meanwhile, across the Pacific, US President Donald Trump has reignited a full-blown trade war with many of America’s trading partners. His administration’s decisions, including the withdrawal from the Paris Agreement, have disrupted global momentum on the Sustainable Development Goals (SDGs) and net-zero targets. These shifts have significantly impacted the Indo-Pacific region, slowing down climate finance and just transition mechanisms that ASEAN nations depend upon.

In this volatile landscape, ASEAN faces heightened risks of supply chain disruptions and trade diversion. Compounding these challenges are persistent development gaps amongst ASEAN Member States (AMS). While AMS must craft their own responses to external shocks, the regional bloc must also position itself strategically – upholding economic resilience and competitiveness while advancing deeper integration.

Staying True to the Mottos

Against this backdrop, Malaysia’s ASEAN Chairmanship in 2025 takes on historic significance, arguably even more so than its pivotal role in 2015. Themed around Sustainability and Inclusivity, this chairmanship coincides with ASEAN’s adoption of the ASEAN Community Vision (ACV) 2045: a forward-looking blueprint for a resilient, innovative, and people-centred region. Malaysia’s national ‘Malaysia MADANI’ vision, led by Prime Minister Anwar Ibrahim, aligns well with this agenda, grounded in values of sustainability, prosperity, innovation, respect, trust, and compassion (Bernama, 2023). Together, these frameworks reflect a growing global expectation for Malaysia to provide the leadership needed to reconcile economic growth with sustainability.

Malaysia has reason for confidence. It was instrumental in advancing the ASEAN Community Blueprints in 2015 and in promoting a balanced negotiation strategy during the Regional Comprehensive Economic Partnership (RCEP) talks, ensuring ASEAN’s interests were well represented vis-à-vis key partners like Australia, Japan, the Republic of Korea, and New Zealand. Looking forward, Malaysia must rise to meet dual challenges: mitigating geopolitical instability and addressing persistent development disparities – while seizing opportunities to champion equitable growth and sustainability. As ASEAN transitions from an integrated economy to a future-ready community, Malaysia’s stewardship must be both visionary and pragmatic, shaping the bloc's trajectory for the next 2 decades. In the face of uncertainty, managing the transition well is a prerequisite for any ASEAN chair to succeed.

Strategic Context: ASEAN Community Vision 2045 and Malaysia’s Priorities

ACV 2045 charts a vision for a prosperous and resilient ASEAN, anchored on four pillars: political–security stability, economic integration, socio-cultural progress, and seamless connectivity. Slated for adoption at the end of 2025, it is accompanied by four Strategic Plans – three aligned with the existing Blueprints and one dedicated to ASEAN Connectivity. Malaysia’s 2025 theme of Inclusivity and Sustainability dovetails with these goals.

Sustainability, built upon economic, environmental, and social dimensions, is a long-standing priority in ASEAN’s cooperation framework (Carpenter, Zulkifli, and McGillivray, 2013). Given ASEAN’s vulnerability to climate risks – rising sea levels, extreme weather, resource depletion – Malaysia should use its chairmanship to champion environmental governance, accelerate climate finance, and embed low-carbon strategies within ASEAN’s frameworks.

Inclusivity, meanwhile, demands policies that ensure ‘no one is left behind.’ As the ACV 2045 demonstrates, ASEAN aspires to embed this principle across all its initiatives. Sub-regions like the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP–EAGA) remain underserved, particularly in infrastructure, digital access, and investment (ALFI/ILFA 2024). With ASEAN’s digital economy projected to reach $1 trillion by 2030, closing the digital divide is imperative (WEF, n.d.).

Malaysia must therefore address social and economic disparities with urgency. Expanding engagement with marginalised communities, MSMEs, and underserved sub-regions, and advocating for digital literacy and green technology adoption amongst SMEs, are practical steps. Malaysia can also lead efforts to deepen strategic partnerships – with the Gulf Cooperation Council, China, India, and multinational development banks – to unlock new opportunities and fortify ASEAN’s role as a global economic hub.

A Make-or-Break Role for a Lasting Legacy

As noted in a Fulcrum article (Noor, 2025), expectations are high. Malaysia has historically played a major role in ASEAN’s strategic goal-setting – spearheading both the ASEAN Economic Community Blueprint and ASEAN 2025: Forging Ahead Together vision in 2015. Now, the challenge is even greater: to shape and anchor the ACV 2045, and ensure its successful implementation over a 20-year horizon.

Institutional reform will be essential amid the rapidly shifting global order (Hoi, 2022, dfa.gv.ph 2023). ASEAN’s growing number of cross-sectoral programmes thus demands a more cohesive and empowered coordinating body. Strengthening the ASEAN institutional architecture would lay the groundwork for more effective implementation and resource mobilisation in line with the ACV 2045.

Having dealt with institutional issues, operationalising the ACV will also require scalable, cross-border pilot projects and innovative financing mechanisms. Malaysia could champion initiatives such as renewable energy grids, regional digital connectivity, and sustainable supply chains – leveraging its industrial base and experience in institutionalising public–private partnerships (Zen and Regan, 2014). Mobilising private capital through instruments and frameworks like the ASEAN Catalytic Green Finance Facility and the ASEAN Capital Markets Forum Action Plan 2026–2030 will be essential.

Geopolitically, Malaysia’s position as a neutral and credible actor enhances its ability to steer ASEAN as a stabilising force. By championing green, blue, and digital economic growth, ASEAN can harness its demographic advantage and natural resource wealth to achieve long-term stability and shared prosperity. It is, perhaps, this set of underlying factors that defines ASEAN uniquely: the young population provides demographic capital, while rich biodiversity positions itself as a frontier for resilient and inclusive economic development in the future.

Amidst the challenges and opportunities, trusted leadership is indispensable to overcoming diplomatic hurdles and strengthening economic integration. Malaysia can lead the way in advancing and upgrading key FTAs, such as RCEP, ASEAN-China, ASEAN-India, and ASEAN-Australia-New Zealand, while embedding sustainability within trade frameworks. Doing so can reinforce ASEAN’s efforts in food and energy security, EV and semiconductor value chains, and tourism development – the region’s promising sectors, all while keeping sustainability and inclusivity front and centre.

The recent wave of trade wars and retaliatory tariffs reveals the fragility of multilateralism. ASEAN learnt from the COVID-19 pandemic the importance of resilience and strategic integration. By accounting for such global shocks in its next strategic and sectoral plans, ASEAN can better position itself to withstand future crises and achieve long-term goals.

Conclusion: Setting Sail Toward ASEAN’s Future

Malaysia’s 2025 ASEAN Chairmanship is more than symbolic; it is a rare and defining opportunity to shape the region’s path for the next 20 years. With bold yet pragmatic leadership, Malaysia can promote climate action, foster equitable development, and strengthen ASEAN’s global partnerships. However, ambition must be matched by concrete action. Consensus must be coupled with innovation. ASEAN’s strength lies in unity and collective action, but its future depends on adaptability.

As ‘nakhoda’, the captain steering the ship, Malaysia has the tools, vision, and moral authority to lead ASEAN through turbulent waters and toward a sustainable, inclusive, and resilient future. While the bloc cannot escape its foundational norms, it must rally behind a steady helm to confront emerging threats and seize opportunities. The journey to 2045 will not be smooth sailing, but with the right leadership, ASEAN can – and must – stay the course.

This opinion piece was written by Dr Intan Murnira Ramli, Senior Policy Fellow, and Ardhana Tahriza Syarif, Research Associate, ERIA, and has been published in CSIS. Click here to subscribe to the monthly newsletter.

Disclaimer: The views expressed are purely those of the authors and may not in any circumstances be regarded as stating an official position of the Economic Research Institute for ASEAN and East Asia.

References

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Bernama (2023), MADANI: A robust framework with six core values. January 19. Accessed 9 April 2025. https://www.nst.com.my/news/nation/2023/01/871761/madani-robust-framework-six-core-values.

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