Kuala Lumpur, 16 November 2023: Today, the Institute for Democracy and Economic Affairs (IDEAS) launched the annual ASEAN Integration Report 2023, as part of the ASEAN Prosperity Initiative (API). The API tracks the progress in implementing the AEC Blueprint 2025, spotlighting pivotal areas for the youth: labour mobility and connectivity, technical and vocational education and training (TVET), micro, small, and medium enterprises (MSMEs), and the digital economy. The report incorporates inputs from a range of stakeholders representing various ASEAN countries, including youth leaders, activists, experts, and representatives from academic institutions and think tanks, obtained through roundtable discussions in Hanoi and Jakarta. 

Dr Juita Mohamad, Director of Research at IDEAS said, “The youth segment, constituting 34% of the ASEAN region’s total population, plays a crucial role in the economy. The ASEAN Community Vision 2025 strategically prioritises youth-related policies to equip this demography with essential tools and resources for their development. Despite these commitments, challenges persist, particularly for vulnerable youth groups. Heightened susceptibility to unemployment is a major concern, exacerbated by the compounding effects of the COVID-19 pandemic.” Pre-existing challenges in the job market are worsened due to job losses, disruptions in education and training paths, and substantial barriers to labour market mobility—referred to as the “triple shock.” This vulnerability is underscored by a notable increase in the proportion of youth categorised as not in employment, education, or training (NEET) between 2019 and 2020, representing a significant untapped potential pool. 

Furthermore, the report delves into the risks associated with labour mobility, emphasising the crucial role of skilled migrants in addressing youth unemployment and supporting the growing youth population. It highlights that intra-ASEAN migration primarily involves low- and medium-skilled workers in the informal economy, with limited mobility for high-skilled workers. It also explores TVET as a potential solution to youth unemployment in Southeast Asia. The report offers policy recommendations, focusing on aligning TVET with labour market demands, rebranding to improve its public image, enhancing equity and accessibility, and harmonising the interoperability of TVET programs among ASEAN Member States (AMS). 

In addition, acknowledging the importance of youth and MSME development outlined in the AEC Blueprint, the report identifies challenges faced by MSMEs in the ASEAN region, particularly in youth-led entrepreneurship. Ongoing challenges include securing external financing and heightened competition. The emergence of microfinancing and embedded banking presents new opportunities for MSMEs. Apart from these issues, the report also examines the specific challenges that ASEAN youths face, including the risks of digitalisation and the increasing digital divide, with a particular focus on women and rural youth especially when digital readiness is an issue throughout ASEAN.

“While challenges persist in terms of education, employment, entrepreneurship and the digital landscape, the report emphasises a shared responsibility to equip ASEAN youth with a robust platform. The optimism lies in the youth’s resilience and ambition, urging ASEAN to collaboratively harness the values of cooperation, shared knowledge, and partnership to address the significant challenges faced by the region, “ ends Dr Tricia Yeoh, CEO of IDEAS.

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