An innovative platform for futures thinking: FES Asia kicks off new regional expert group

Geopolitics of trade and supply chains

Asia has become the centre of global economic gravity. The nature of globalization is changing in the context of accelerated shifts in supply chains during the COVID-19 crisis, the increasing weaponization of trade issues and the emergence of competing trading blocs. Geo-economic trends including reshoring and nearshoring are gaining momentum. A paradigm shift from efficiency (‘just in time’) to resilience (‘just in case’) in the global economy is slowly evolving, especially with a view to making global value chains less vulnerable for strategic goods.

Against this backdrop, the lab’s opening session explored the specific challenges and opportunities for Bangladesh as a graduating least-developed country (LDC), India in the aftermath of its withdrawal from the Regional Comprehensive Economic Partnership (RCEP), Vietnam as a key pillar of the ASEAN trade architecture and the European Union with its new trade strategy.

The European Union in the Indo-Pacific

The Indo-Pacific is widely considered the most important geopolitical theatre of the 21^st century. The launch of a joint EU strategy for the region and bilateral strategies by Germany, France and the Netherlands speaks to its strategic relevance. How is the European Union’s growing engagement viewed by experts from China, Japan, Singapore and Germany?

It was highlighted that the EU’s presence as a neutral player has the potential to bring a balance and provide a third option to countries who do not wish to take sides in an increasingly bi-polar region. As an economic and normative power, the role of Brussels in championing multilateralism and promoting the rules-based order was considered critical. The EU’s capacity to deliver as one and to overcome internal divisions was seen as key for its future engagement. At the same time, it was noted that the understandings and perceptions when it comes to the very concept of the Indo-Pacific vary across the region, which makes an inclusive and cooperative posture all the more important.

Development paths of least-developed, landlocked and transition countries

The different dimensions of the unfolding geopolitics in Asia pose particular challenges for less developed economies. From the Taliban takeover and humanitarian crisis in Afghanistan and the ongoing conflict in Myanmar to the specific challenges of Nepal’s geography and the unique geopolitical situation of Mongolia, developing and transition countries face enormous tasks when it comes to future-proofing their development models.

While the specific circumstances vary greatly, many countries share common economic development barriers to inclusive and sustainable growth, are disproportionately dependent on foreign aid and direct investments, have significant informal sectors with precarious working conditions and find themselves – despite often being rich in natural resources – in a delicate geopolitical balancing act. Against the backdrop of these challenges, the session explored ways to move from landlocked to land-linked in the mid- and long-term future and to address strategic vulnerabilities.

The Asian security complex

Collaborative and inclusive frameworks for dialogue are being increasingly challenged in the new geopolitics of Asia. All across the region, a “strategic new normal” is taking shape characterized by complex patterns of competition, conflict, cooperation and (dis-)integration. Multilateralism is under pressure and yet more important than ever to tackle joint challenges such as climate change and the post-COVID recovery.

Competition between major global and regional powers around trade & supply chains, high technology & AI as well as critical infrastructure & energy continues to intensify. The China-US rivalry will decisively shape the region’s geopolitical and geo-economic trajectories in the decades to come. Smaller and medium-size countries remain determined not to choose sides between the two superpowers and are seeking ways to successfully navigate in an uncertain environment.

Participants noted with concern the unfolding arms race in Asia, in the context of new alliances and counter-alliances and a shifting regional security balance, and pointed to the many conflict hotspots in the region. A noteworthy trend stressed throughout all sessions was the emergence of bi-, mini- and plurilateral issued-based coalitions around common strategic interests, which are increasingly competing with larger multilateral settings where often compromises are forged around the lowest common denominator.

Regional trade and supply chains

The lab explored the pandemic-induced changes in regional and global supply chains and the opportunity they provide to build back better and create more inclusive and sustainable international trade arrangements that put workers’ rights at the centre. With geopolitical and geoeconomic shifts gaining momentum at rapid speed, trends such as decoupling, reshoring and nearshoring will require further examination. A paradigm shift from efficiency (‘just in time’) to resilience (‘just in case’) in the global economy is slowly evolving, especially with a view to making supply chains less vulnerable for strategic goods. Upholding ILO core conventions, promoting broader regional cooperation and prioritizing practical solidarity will be key ingredients for a human-centred economy of tomorrow.

Labour migration and social protection

The number of migrant workers in Southeast Asia remains high, impacting the development models of both countries of origin and destination in a changing geoeconomic environment. Border closures, social distancing measures and economic lockdowns left migrant workers in a particularly vulnerable position. Lab participants emphasized the need to have a transnational perspective to solve this challenge through better coordination on the regional level, social protection schemes and enhanced tripartite cooperation, including through the ASEAN Forum on Migrant Labour.

Vaccine diplomacy and health security

The geopolitical weaponization of vaccines adds to the uncertainty felt regarding human security in a post-COVID world, especially in light of weakened multilateralism. Stretched public healthcare systems and an often inadequate infrastructure further exacerbate the challenge of health security. A steady supply of vaccines remains a major challenge towards achieving vaccine equity. Localizing production capacity is an immediate imperative along with de-monopolizing knowledge and technology needed to effectively fight the pandemic. A key discussion point in the lab was whether vaccine diplomacy impeded a collective international effort to fight the pandemic. Participants emphasized the merits of a truly multilateral effort in solving a challenge of such a global scale with a strong voice for the Global South.

Future of work

The pandemic has provided an opportunity to implement structural changes in the future of work and to promote socially just, inclusive, resilient, and green growth models. Automation and digitalization, and their consequences for jobs and social mobility, remain a pivotal question for the trajectories of societies across the region. Workplace digitalization and AI solutions, gig work facilitated by digital platforms and leaps in production robotics are continuously changing the world of work. The COVID-19 crisis has further accelerated these trends and exposed major fault lines. Addressing the increasing digital divide, not least with a view to promoting gender equality, and designing more inclusive and sustainable work environments with a reinforced role for trade unions were among the policy recommendations highlighted.