[JAKARTA] South-east Asia must strengthen its efforts to attract long-term investment by enhancing trust, improving human capital and building a more compelling regional narrative, former Indonesian president Susilo Bambang Yudhoyono said, warning that rising geopolitical tensions and economic realignments are reshaping the global investment landscape.
Speaking at the Asia Economic Summit 2025 in Jakarta on Thursday (June 26), Yudhoyono said the region faces both opportunities and risks as industries increasingly shift out of China in response to global trade tensions, particularly between the US and China.
“As some industries begin to relocate from China, South-east Asia has a real chance to position itself not just as a destination for low-cost labour, but as a strategic hub for innovation, logistics and regional integration,” he said.
However, he cautioned that seizing this moment will require agility and diplomatic balance. “As we see China as an important source of technological capital, we also see the US and the West as indispensable sources of financial capital, therefore we need to maintain relationships with both with respect, mutual trust and mutual benefit.”
The former president, who led Indonesia from 2004 to 2014, emphasised that to remain competitive, South-east Asia needs to expand its fiscal space; improve financial intermediation, particularly for small and medium enterprises; and invest heavily in education and skills training to prepare workers for an increasingly automated, AI driven future.
His remarks come at a time when several South-east Asian economies have been impacted by elevated tariffs under US President Donald Trump’s administration.
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In response, some have entered negotiations with Washington in hopes of easing trade pressures and preserving export competitiveness.
Amid mounting global volatility, from the wars in Ukraine and Gaza to intensifying strategic rivalries between major powers such as US, China and Russia, Yudhoyono urged South-east Asia nations to project a united and dependable front to international investors.
“Investors want to know that our rules are stable, our systems are fair, and our societies are resilient,” he said. “Trust between governments, with the private sector, and with citizens, is fundamental in attracting long-term capital.”
Yudhoyono also urged South-east Asian nations to tell a more unified and compelling story on the global stage. “The world often views South-east Asia through a fragmented lens. We must shift that perception. Diplomacy and storytelling are strategic capital.”
