Australia’s economic future lies in South-East Asia, Prime Minister Anthony Albanese has declared.

The PM unveiled a strategy for deepening economic ties with South-East Asia by 2040 at the ASEAN Indo-Pacific summit in Jakarta on Wednesday.

“This is where Australia’s economic destiny lies, and this is where our shared prosperity can be built,” Mr Albanese said.

On the summit’s sidelines, the PM had bilateral meetings with Xanana Gusmao, Prime Minister of Timor-Leste, and Malaysian PM Anwar Ibrahim before being hosted by Indonesian President Joko Widodo at a gala dinner.

But Mr Albanese is far from the first Australian PM to laud South-East Asia as the next big thing on the economic horizon.

And still, the strategy concedes, the economic potential of deeper ties has lain underexploited.

Growing economies

The Association of South-East Asian Nations groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Together, they represent $3.6 trillion in economic output, more than Britain, France or Canada.

With tens of millions of people every year projected to move to cities, enter the middle classes and spend on consumer goods, these economies are projected to grow in size and sophistication.

By 2040, the GDP of the region’s combined economies will rise by more than 380 per cent, according to projections in the report authored by former Macquarie banker Nicholas Moore, Australia’s envoy to the region.

And yet Australians have less money invested in South-East Asia than New Zealand; our share of foreign direct investment in the region trails significantly behind Canada or China.

Australia’s share of foreign direct investment in the region fell over the past five years while money from elsewhere in the globe poured in.

And over the past 15 years the growth in our trade with the region has been well short of that recorded across the region’s economies.

Mr Moore’s strategy comprises 75 recommendations for boosting trade and investment, underpinned by a budget of nearly $100 million to help businesses get their feet wet and make connections.

It’s not just economic opportunities that beckon for Australia.

“National security and economic prosperity are two sides of the same coin,” Mr Albanese said.

In an opening speech, Mr Joko lamented a region overshadowed by great powers.

“Don’t turn our ship into an arena for destructive rivalry,” the Indonesian President said.

Deafening silence

Last week, China released a map with a “10-dash line” delineating what it considers its waters, which appeared to expand its claims over waterways in the South China Sea around Vietnam, Malaysia and the Philippines.

Several ASEAN members rejected the map.

But the regional bloc, which takes decisions by consensus and has a principle of non-interference in member states’ domestic affairs, is facing questions about its effectiveness and reason for being.

Marty Natalegawa, a former foreign minister of Indonesia, perhaps summed it up best when he voiced concerns over ASEAN’s “deafening silence” on issues like the South China Sea tensions.

These dynamics make South-East Asia all the more important for Australia, whose foreign policy aims to make the region more competitive at a time when Beijing’s domination is on the rise.

This is Mr Albanese’s third trip to Indonesia.

Earlier this year, Mr Joko visited Sydney, and the two leaders signed a clean energy investment deal that would help establish a new regional supply chain for minerals such as lithium, which are used to make batteries.

The market is currently cornered by China.

Mr Albanese heads to the Philippines later this week and will travel on to India over the weekend for the G20 summit.