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ASEAN’s IMT-GT drives regional economic growth and integration in Southeast Asia.

The Southeast Asian region stands at a critical juncture, teeming with potential across multiple sectors, presenting a unique opportunity to propel national and regional ambitions forward. A cornerstone of this effort is the ASEAN Economic Community (AEC), inaugurated on December 31, 2015, to deepen regional economic integration. Among the initiatives championed by ASEAN is the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), a collaborative venture that has been instrumental in driving regional economic growth.

On March 18, a Plenary Strategic Planning Meeting convened to assess the cooperation between the three IMT-GT nations. Attendees included university networks, Joint Business Councils (JBC), ministries, regional representatives, and entrepreneurs, all underscoring the positive impact of IMT-GT. Since its inception nearly three decades ago, IMT-GT has significantly bolstered the regional economy, contributing an impressive $405 billion. However, to continue this trajectory and ensure sustainable growth, it is imperative to strengthen each IMT-GT country’s economic independence, reducing reliance on bilateral relationships.

ASEAN, a coalition of ten nations with a combined population of 664 million, ranks as the third-largest population bloc globally, representing 8.4% of the world’s population. This demographic clout underscores Southeast Asia’s potential to advance its regional development through a multi-sectoral approach, engaging both government and local communities. In this context, Indonesia, Thailand, and Malaysia—nations that share common values and geographical proximity—are key players.

Indonesia-Malaysia-Thailand Growth Triangle
Indonesia-Malaysia-Thailand Growth Triangle. (IMT-GT)

The IMT-GT initiative spans 32 provinces: ten in Sumatra (Indonesia), including Aceh, North Sumatra, and Riau; seven in Malaysia, including Perlis and Pulau Pinang; and eleven in Thailand, including Yala and Songkhla. The initiative’s focus encompasses tourism, agriculture, infrastructure development, human resources, and professional services.

The tourism sector, with substantial contributions from Indonesia and Malaysia, has notably rebounded post-pandemic. In 2023, Malaysia welcomed 20 million foreign tourists, a 77% increase, while Indonesia attracted 11.7 million tourists, primarily to Bali. Although Bali lies outside the IMT-GT focus area, these figures highlight the potential to balance tourist distribution by innovating within the targeted IMT-GT provinces.

The stark contrast between Bali’s tourism infrastructure and other Indonesian regions underscores Bali’s superior facilities and rich cultural offerings. Bali’s tourism model, which seamlessly blends extensive amenities with immersive cultural experiences, raises pertinent questions about the strategies employed in IMT-GT destinations, particularly in Sumatra.

As a regional cooperation initiative, IMT-GT requires that participating governments prioritize the development of tourism infrastructure and industrial sectors within these targeted areas. Indonesia’s diverse regions, each with unique cultural attributes, present significant opportunities to showcase their distinct advantages. The government must provide both fiscal and non-fiscal incentives to tap into regional potential, thereby nurturing the growth of tourism and related sectors.

Moreover, the IMT-GT framework presents significant opportunities for expanding the halal industry. With the global Muslim population projected to reach 27.5% by 2030, the halal industry is a robust growth sector. ASEAN member countries, particularly those in the Global South, can harness this trend to meet market demands and enhance access to halal products. Although the development of halal industry cooperation has been limited, ASEAN’s regional collaboration offers a valuable platform to maximize this sector’s potential.

The benefits of IMT-GT cooperation extend beyond Indonesia to Malaysia and Thailand. The success of their trade collaboration, which reached $89 billion, and the 20% annual growth of Thailand’s halal industry underscore the tangible impact of this partnership. Despite being predominantly Buddhist, Thailand’s active participation in IMT-GT signals its commitment to fostering multilateral relations and positioning itself as a welcoming and tolerant tourist destination.

IMT-GT is not just a strategy for regional cooperation; it’s a blueprint for establishing a new world economic order, particularly within the framework of ASEAN’s Non-Intervention Principle. By leveraging the unique potentials of its member countries, IMT-GT seeks to foster financial independence and reduce reliance on external powers. This approach addresses the longstanding issue of underinvestment in infrastructure and industrial sectors in the Global South, which has historically limited access to essential services like education and healthcare.

While the ASEAN Non-Intervention Principle may limit regional conflict resolution, IMT-GT can optimize its cooperative efforts to bolster the regional economy, resolve conflicts through economic stability, and enhance humanitarian aid. This strategy aligns with the broader goals of the Global South, fostering development cooperation between developing nations.

A bottom-up approach is essential to achieve the ambitious goals outlined in IMT-GT Vision 2036, ensuring inclusivity and equality in development objectives. This involves meticulously evaluating local communities’ needs to guide sectoral development, shifting focus away from urban areas and toward remote regions with untapped potential.

Furthermore, given the substantial population of IMT-GT member countries, it is crucial to support micro, small, and medium-sized companies through government and private sector involvement. Such support will foster sustainable economic growth and reduce dependence on external countries, strengthening ASEAN’s regional cohesion.

Indonesia, in particular, must recalibrate its foreign policy to mitigate overreliance on bilateral relations. Instead, it should prioritize regional cooperation to fully capitalize on IMT-GT’s potential. This approach will enhance regional development and align with the broader objectives of ASEAN.

While IMT-GT has made significant strides, continued efforts to optimize cooperation and focus on inclusive, sustainable development are vital to achieving Vision 2036 goals and deepening Southeast Asia’s economic integration.

Nani Septianie is a Master's student at Universitas Gadjah Mada majoring in International Relations. Her research interests include diplomacy, international cooperation, ASEAN and European Studies.