ASEAN deepens integration as global fragmentation accelerates: DPM Gan

SINGAPORE, 6 AUGUST 2026 —

ASEAN’s response to rising geopolitical rivalry and protectionism is to accelerate economic integration, Deputy Prime Minister Gan Kim Yong said on July 31.

DPM Gan highlighted ASEAN’s coordinated response to the Covid-19 pandemic, when members strengthened supply chains, and the upgrade of the Trade in Goods Agreement in 2025 after the United States announced sweeping global tariffs. He said the grouping’s ability to integrate is rooted not in economic similarity but in trust built through shared crises.

“Because we have gone through many crises together, and with every crisis, we were able to overcome and work together, it deepens the trust among ASEAN members,” he said.

The Digital Economy Framework Agreement (DEFA), due to take effect in 2027, is the latest step in ASEAN’s integration. It aims to simplify cross-border digital trade, data flows, payments and online transactions, helping small and medium-sized enterprises scale regionally. DPM Gan said DEFA’s success will depend on active participation from the business community.

After DEFA, ASEAN plans to prioritise artificial intelligence collaboration, focusing on capability development, interoperability, standards, governance and practical applications. Longer-term projects, such as the Green Economy Agreement and the ASEAN Power Grid, will require more time to reach consensus.

DPM Gan said Singapore’s 2027 ASEAN chairmanship will focus on deepening internal integration while expanding engagement with the rest of the world.

John Kain, vice-president and global head of financial services at Amazon Web Services (AWS), said the US tech giant plans to invest more than US$33 billion in cloud and AI infrastructure across Indonesia, Malaysia, Singapore and Thailand by 2039. The investment is expected to support thousands of jobs annually and add US$64 billion to the four countries’ combined gross domestic product by 2039.

Kain said AWS has trained over 2.7 million people in Southeast Asia in cloud skills since 2017. He urged companies to adopt AI now rather than wait for perfect solutions. “Don’t wait for the perfect model because it will continue to evolve,” he said. “The challenge is always: How does the technology get implemented and integrated into your business operations so it augments productivity and efficiency?”

Edmund Leong, head of corporate banking at UOB, described AI as an economic growth story with tangible returns for businesses. “AI is not just a technology story,” he said. “It is an economic growth story in terms of business impact. Companies adopt it because it delivers positive economic returns.”

Aw Kah Peng, chairman of Shell Companies in Singapore, called for building a resilient energy market amid supply disruptions and price volatility triggered by the Iran war. “The volatility is very real. No one knows when it’s going to settle down or resolve itself,” she said. “Volatility is here to stay. We need to learn how to continue operating and growing in this state.”

She noted that ASEAN, with about 10% of the global population, uses only 50-60% of the European Union’s energy levels, leaving room for growth without compromising cleaner energy goals. “There is a huge amount of opportunity ahead to invest in energy for growth,” she said.

For Malaysian business readers, ASEAN’s push for deeper integration—especially through DEFA and AI collaboration—creates opportunities for companies to expand regionally and adopt new technologies sooner rather than later.

Related: UOB · Singapore