Asia strengthens regional cooperation amid global fragmentation

Two fundamental forces are reshaping the global economic and financial landscape: intensifying economic fragmentation and the rapid technological revolution led by AI.

Fragmentation is now intentional and policy-driven, pursued for security, resilience, and sovereignty, rather than episodic.

These advances transform business operations, economic growth, risk management, and financial systems, promising productivity gains but straining regulatory frameworks and labor markets.

Mr. Omar views these forces as permanent features of the global economy, introducing persistent uncertainty.

Asia, deeply integrated into global trade, supply chains, and capital flows, is already experiencing these effects firsthand, from supply chain reconfiguration to volatile financial markets.

He argues that strong national policies combined with deeper regional cooperation are essential for navigating this heightened uncertainty.

Mr. Omar outlined three key areas of regional cooperation.

First, strengthening the regional financial safety net, with the CMIM doubling in size to USD240 billion and transitioning to a paid-in capital structure.

Second, fostering inclusive growth through expanded cross-border payment linkages, now covering 28 ASEAN corridors and enabling widespread QR payments.

Third, effectively recycling Asia's substantial savings into productive regional investments, particularly for infrastructure and energy transition, estimated at USD3.1 trillion by 2030.

This requires deepening financial integration and leveraging innovative financing approaches like blended finance.