New ASEAN pact set to transform regional trade, connectivity
ASEAN is on the cusp of entering a “golden age” driven by five key factors and a landmark digital economy agreement, said Jirayut Subsrisopa, founder and chief executive officer of Bitkub Capital Group Holdings.
Speaking at the ASEAN Economic Outlook 2025 seminar on Monday, Jirayut outlined how the upcoming ASEAN Digital Economy Framework Agreement (DEFA) could inject up to US$2 trillion (66.88 trillion) into the region's economy.
"DEFA will unify over 600 million people in a single digital marketplace, positioning ASEAN to become the world's fourth-largest economy," he said. The legally binding agreement, already more than 50% complete, aims to create borderless digital connectivity between member states.
Meanwhile, Jirayut identified five crucial factors driving ASEAN's economic rise, highlighting the region's strong growth potential bolstered by the DEFA agreement.
He noted the demographic advantage presented by countries such as Vietnam and the Philippines, which possess young and dynamic workforces ready to contribute to economic development.
Additionally, competitive production and labour costs have made ASEAN an attractive destination for international investors. The region is also rich in natural resources, including valuable rare earth elements, further enhancing its economic appeal. Finally, Jirayut emphasised the significance of regional stability, which provides a conducive environment for growth in the face of escalating global geopolitical tensions.
Despite the optimistic regional outlook for ASEAN, Jirayut said that Thailand faces several urgent challenges that could hinder its economic progress. One significant concern is the record-high household debt, which has reached 93% of the country's GDP, threatening the financial stability of many families.
Furthermore, declining foreign investor confidence attributed to governance issues presents another obstacle to growth. He also pointed out the need for Thailand to adapt to new environmental regulations, as failing to do so could lead to capital outflow and further economic strain.
Compounding these issues is a considerable skills gap, with Thailand producing "50 times fewer new graduates in critical fields than Vietnam", he said, highlighting the urgent need for investment in education and workforce development to remain competitive in the region.
"Thailand must strengthen its foundational economy to become the cornerstone of ASEAN's growth," he said. "Without addressing these challenges, we risk missing out on the region's digital transformation."
The DEFA agreement, scheduled for 2025, is expected to revolutionise regional trade.
"Even with just 60% implementation, DEFA could attract more than $2 billion in investment to the region," Jirayut noted.
As Thailand takes the lead in negotiations, the proposed agreement promises to create a unified digital economy framework that will facilitate borderless trade among member states.
This initiative aims to attract global investors and developers, fostering a more integrated and dynamic economic environment within ASEAN.
Furthermore, the agreement is poised to establish legally binding cooperation among all ASEAN members, ensuring a collaborative approach to economic growth and development in the region.
As ASEAN prepares for this digital transformation, Jirayut said the success of individual nations will depend on their ability to address domestic challenges while embracing regional integration.
