When we think of regional integration, the focus often falls on high-level diplomacy and grand political agreements. Yet, behind the scenes, a quieter but no less significant force is at play: the role of business in weaving the economic fabric of a region. In Southeast Asia, this role is embodied by the ASEAN Business Advisory Council (ASEAN-BAC), an institution tasked with representing the private sector in the region’s integration journey. However, ASEAN-BAC’s journey is far from smooth, reflecting the broader challenges of creating unity in a region as diverse as ASEAN.

The Ambitious Blueprint of ASEAN Economic Integration

ASEAN’s ambitions for regional economic integration are embodied in the ASEAN Economic Community (AEC) 2025 Blueprint, which envisions a cohesive, competitive, and globally integrated economic region. The inclusion of the private sector in this process is essential. Businesses are, after all, the drivers of trade, investment, and innovation—the lifeblood of any economy.

Since its establishment in 2003, ASEAN-BAC has sought to amplify the voice of businesses, from micro, small, and medium enterprises (MSMEs) to multinational corporations, in the integration process. It acts as a bridge between the private sector and policymakers, offering recommendations and pushing initiatives that support the region’s economic goals. But the council’s structure and its fragmented representation of interests often reveal the tension between ambition and execution.

Fragmentation in Representation: A Persistent Challenge

One of ASEAN-BAC’s greatest challenges lies in its representation. Each ASEAN member state appoints three representatives to the council, typically drawn from prominent sectors like finance, logistics, and manufacturing. While this structure ensures some diversity, it has also created a bias towards larger businesses, leaving many smaller enterprises underrepresented.

This bias is not merely an issue of fairness—it undermines the inclusivity needed for regional integration to be truly effective. MSMEs, which account for over 90% of businesses in ASEAN and employ a significant portion of the region’s workforce, often find their voices drowned out. Without adequate representation, these smaller players struggle to access the opportunities promised by regional integration.

Legacy Projects: A Mixed Bag of Progress

ASEAN-BAC’s legacy projects are a key tool for fostering integration. These initiatives, proposed and led by individual member states, aim to address pressing economic issues. For instance, the ASEAN Mentorship for Entrepreneurs Network (AMEN), spearheaded by the Philippines, provides mentorship programs to help MSMEs scale up and navigate regional markets.

While some legacy projects, like AMEN, have shown promise, others have faltered. The success of these projects often hinges on the commitment and resources of the initiating member state. When leadership changes or priorities shift, projects can stagnate, leaving their potential unrealized. This inconsistency underscores a broader issue within ASEAN-BAC: the need for stronger coordination and accountability across its initiatives.

Navigating Regional Fragmentation

ASEAN-BAC’s struggles reflect a deeper issue within ASEAN: the fragmentation of regional integration efforts. Unlike the European Union, which operates under a supranational framework, ASEAN is a loose intergovernmental organization. This means that integration efforts depend heavily on the political will and capacity of individual member states.

Take, for example, the issue of non-tariff barriers (NTBs). Despite ASEAN-BAC’s repeated calls for their reduction, NTBs have continued to proliferate, driven by the protectionist policies of individual states. This not only hampers trade but also undermines the very essence of regional integration.

A Path Forward: Strengthening ASEAN-BAC’s Role

For ASEAN-BAC to fulfill its potential, it must address its internal challenges and reimagine its role in the region’s integration process. First, the council needs to broaden its representation, ensuring that MSMEs and other underrepresented sectors have a seat at the table. This could involve creating advisory panels or working groups dedicated to specific industries or issues.

Second, ASEAN-BAC must enhance its internal coordination and accountability. This includes streamlining its legacy projects to focus on fewer, more impactful initiatives and ensuring that all member states are equally committed to their success.

Third, the council should leverage technology to improve its outreach and engagement. Digital platforms can help bridge the gap between policymakers and businesses, particularly those in remote or underserved areas.

Finally, ASEAN-BAC must strengthen its advocacy efforts, both within ASEAN and beyond. By building stronger partnerships with international business councils and organizations, the council can amplify its voice on the global stage and attract the investment needed to drive regional growth.

Beyond Economics: The Broader Impact of Integration

The stakes for ASEAN’s economic integration go beyond trade and investment. A more cohesive region can better navigate the challenges of globalization, from climate change to digital transformation. It can also serve as a counterweight to the growing influence of external powers, ensuring that ASEAN remains a central player in the global economy.

ASEAN-BAC’s role in this process is crucial. By championing the interests of businesses, particularly smaller and more vulnerable ones, the council can help create a more inclusive and resilient regional economy. But to do so, it must overcome its internal challenges and align its efforts more closely with the broader goals of ASEAN integration.

Conclusion: A Work in Progress

The story of ASEAN-BAC is one of promise and potential. It embodies the aspirations of a region striving for unity amidst diversity, of businesses seeking to transcend borders in pursuit of shared prosperity. Yet, like ASEAN itself, it is a work in progress—a reflection of the challenges and complexities of regional integration.

As ASEAN approaches the midpoint of its AEC 2025 Blueprint, the role of ASEAN-BAC will only grow in importance. Whether it can rise to the occasion will depend on its ability to adapt, innovate, and collaborate. In doing so, it can help ensure that the benefits of integration are felt not just by the region’s largest players, but by all its people.

*This article is an excerpt from an academic journal. Read the full publication here.