Asean: ASEAN must urgently strengthen regional coordination and craft a cohesive strategy on energy security and economic resilience in response to escalating geopolitical tensions and supply chain disruptions, said Universiti Kebangsaan Malaysia Vice-Chancellor Prof Datuk Dr Sufian Jusoh.
According to BERNAMA News Agency, the bloc with approximately 700 million people should consider convening an emergency Special Leaders' Meeting involving heads of government and economic ministers to formulate a unified response aligned with the ASEAN Vision 2045, which emphasizes building a resilient and agile regional bloc.
Prof Sufian highlighted that ASEAN must act collectively as a regional group, particularly in addressing challenges related to energy security, supply chain disruptions, and the overall economic health of the region. He made these remarks at the ASEAN+3 Regional Economic Outlook and ASEAN+3 Fiscal Policy Report Outreach Seminar.
During the 90-minute seminar jointly hosted by Institut Kajian Malaysia dan Antarabangsa (IKMAS) and ASEAN+3 Macroeconomic Research Office (AMRO), Sufian expressed the urgency for member states to adopt a long-term strategy for energy transition. This includes expanding renewable energy sources such as hydrogen, solar, and wind, even as some member states currently face immediate pressures on fuel reserves.
Beyond energy concerns, Sufian stressed the importance of structural reforms to enhance regional economic integration by reducing overdependence on external supply chains, especially those involving major economies like China and the United States. He advocated for ASEAN to boost intra-regional trade, investment, and production capacity and to address food security vulnerabilities by promoting localized agricultural production across member states.
The upcoming 48th ASEAN Summit, scheduled for May 8-9 in the Philippines, is set to focus specifically on economic shocks, oil supplies, and food security issues exacerbated by the US-Iran conflict. During a recent special meeting held on April 13, ASEAN Foreign Ministers discussed the severe energy and economic impacts of the ongoing conflict, calling for a permanent ceasefire and the restoration of safe passage in the Strait of Hormuz. This conflict has led to an energy crisis in the region, prompting calls for unified action to manage oil, food, and supply chain disruptions.
Focusing on Malaysia, Sufian described the government's implementation of the B15 biodiesel program as a positive development but cautioned that reliance on fossil fuels remains significant and requires further policy strengthening. He also highlighted the need to improve public transportation infrastructure and connectivity, particularly addressing last-mile challenges, to reduce overall energy consumption and dependence on fuel subsidies.
Sufian expressed concerns over the growing burden of fuel subsidies for the government, noting that these could reach up to RM36 billion annually if not addressed. He suggested transitioning towards a more targeted subsidy mechanism, where assistance is directed to lower-income groups while higher-income earners pay market prices. He stressed the need to reallocate certain subsidies, especially towards diesel, due to its direct impact on small businesses and the cost of essential goods such as food.