The US/Israel-Iran war now dominates risk assessments and scenario planning for the private sector in Southeast Asia. This, alongside the harsher reality of inflation spikes and uncertainty, is eroding margins, delaying investment decisions and complicating day-to-day business operations. This matters for ASEAN not only because geopolitical tensions are global, but because their impacts are immediate.

Much of Southeast Asia is highly dependent on oil shipments that originate in the Middle East. When the region faces disruptions in energy supply, the shock does not stay in the headlines but quickly translates into higher transportation costs, unstable input prices for manufacturers and reduced purchasing power for consumers. For the private sector, energy price volatility hits supply chains, budgeting and competitiveness.

At the same time, ASEAN businesses are already absorbing disruption from AI and other digital technologies. For many MSMEs – our most important engine of job creation and local enterprise growth – digital disruption is a challenge to our readiness, access to affordable technology, skills, trustworthy payments and the ability to integrate into regional and global value chains.

So the question ASEAN businesses are now asking is, “How do we build resilience under the intersecting shocks of geopolitical conflict, energy, inflation and digital disruption without losing our momentum in development?”

This is precisely why the private sector’s role must be discussed with urgency and ownership. As ASEAN finance ministers and central bank governors meet this week, it is also time for the private sector to step in with its tools and solutions across finance, technology, risk financing and sustainable energy.

In the private sector agenda, priorities remain consistent even as the environment becomes more volatile: MSMEs, health, digital technology, connectivity, risk financing and insurance and renewable sources of energy.

We must help MSMEs – the drivers of economic development – survive the shocks and protect them against disruption through risk financing and insurance, the tools that are available to us in the private sector to aid the government in its fiscal constraints. Because our workforce is the lifeblood of our economies, we must continue to upskill and look after their well-being. We must strive for inclusivity in digital technologies and reduce friction. We must also become serious about solutions to global finance for green energy so that sustainable energy supply can help during times of geopolitical pressure.

These priorities are interconnected. For example, MSMEs that can access digital payments and standardized documentation can move faster into regional trade. MSMEs that can purchase risk insurance and obtain financing through predictable processes can maintain operations even when energy prices spike. And MSMEs that can access green energy finance can strengthen long-term competitiveness while reducing exposure to fuel volatility.

With governments facing significant fiscal constraints, the burden of stabilization and growth cannot rest only on public budgets. The private sector must mobilize financing and capital solutions to support economic activity and development outcomes.

Another issue that is raised is that of standardization, which experts see as the foundation of integration. Standardization is the infrastructure of regional trust and speed. Consider how many systems depend on shared standards across ASEAN: there are customs processes, digital payments, trade and data documents and many more.

If ASEAN wants to move forward, we have to find a way to resolve this. Otherwise, even the best solutions will remain limited to certain markets, certain corridors or certain institutions. That fragmentation undermines resilience because businesses cannot easily shift suppliers, routes, insurance coverage or financing options during emergencies.

So we must be specific and action-oriented and distill the challenges into clear agenda items and raise them consistently in regional dialogues in spaces like the ASEAN Business Advisory Council, where private sector priorities can be translated into policy engagement.

The crisis environment also offers a strategic opportunity for ASEAN to harness the power of innovation finance and regional cooperation to accelerate solutions faster than traditional instruments would allow.

Innovation finance could include blended mechanisms that reduce risk for private lenders, structured products that extend credit to MSMEs and insurance-linked strategies that strengthen supply chain continuity. Regional cooperation could include harmonized approaches to payments, documentation and financing frameworks – so capital and trade can move with fewer frictions.

As we must make MSMEs visible and a viable investment for creditors, we must also make resilience bankable. If risk can be measured consistently, financed efficiently and insured reliably, then businesses can protect output, retain employment and continue investing – even under unstable conditions.

The challenges facing ASEAN are complex. But complexity does not justify fragmentation. In fact, complexity is exactly why ASEAN unity matters: an integrated region can respond more effectively, because it can coordinate logistics, policy alignment and market access faster than each economy acting alone. Ultimately, an integrated, united ASEAN region strengthens each member-country’s capacity to deal with future shocks – geopolitical, energy, digital, financial and health-related.

The private sector is ready to play its part by investing, innovating, mobilizing financing, supporting MSMEs, expanding digital and connectivity solutions and partnering on sustainable energy access. But we also call for enabling ecosystems – where standardization becomes real, collaboration becomes routine and private solutions can scale.

When governments face fiscal limits and when shocks hit across borders, the next phase of ASEAN growth requires shared action. Resilience will not be delivered by policy alone. It will be delivered through partnerships – at an ASEAN scale, and with private sector playing a big role.

 Originally Published in Philippine Star