When the Association of Southeast Asian Nations, ASEAN, was formed in 1967, the five founding states intended to produce a front against the spread of communism. The venture has since grown to include a total of 11 countries, producing a remarkable set of unforeseen consequences, from becoming the fifth-largest economy in the world to reinforcing peace across a swath of diverse and developing countries.

Instead of pursuing Cold War initiatives, the bloc has become increasingly integrated, tied together through manufacturing supply chains, trade infrastructure, and shared financial institutions like the Chiang Mai Initiative. ASEAN now produces over $4 trillion in GDP and has a population of 678 million people. The collaboration’s biggest success, however, has not simply been increased commerce. With economic integration comes regional stabilization and peace, a consequence further fostered by the signing of the Regional Comprehensive Economic Partnership (RCEP) in 2020, which includes Australia, China, Japan, New Zealand, and South Korea. Economic cooperation in the Asia-Pacific has been the key driver of peace in the region ever since 1952 with the Treaty of San Francisco, and it serves today as a key example of how market mechanics can drive peacebuilding. In fact, it was ASEAN that eroded tensions from the Konfrontasi war in the early 1960s, and has solidified the climate of peace between the Southeast Asian members ever since.

Economists and politicians have often considered the question of whether trade contributes to peaceful relations between states. The affirmative answer is not novel; however, in the case of ASEAN and the Asia-Pacific, the specifics begin to clarify the theory. Peacebuilding through economic means is more a matter of building economic capacity and trade interdependence than of simply trading goods between nations. This crucial specification turns the Asia-Pacific from a successful case study into a model for peacebuilding elsewhere, and it is one that has been imitated by the Gulf Cooperation Council or, more recently, by the C5 in Central Asia.

Economic interdependence is a consequence of cooperation, occurring over time by building trust and relying on companies that diversify operations across countries. Daron Acemoglu, a Nobel Prize winner in Economic Sciences, has regularly argued for this by pointing out that both prosperity and stability mutually flow from systems or institutions that offer a broad stake in the economic growth of a nation. Thus, when firms create cross-border commerce, war becomes economically unviable and politically undesirable. The principle is not exclusive to the Asia-Pacific, and despite ASEAN’s success, it is clear that outliers perpetuate risks by building up economic barriers instead of interdependence. Examples include relations between North and South Korea or China and Taiwan. The question, therefore, remains: how can peace be built today through economic interdependence, or in other words, how can rivals begin working together in an economic capacity?

Answers learned in the Asia-Pacific could resound further away. In the Middle East, for example, diplomatic efforts for peace in Afghanistan, Iraq, Syria, and Israel and the Palestinian Territories have worked through a long campaign of advocacy; however, it is only with the additional incentives that economic cooperation brings that peace efforts actually remain sustainable and enduring. For Israel and the Palestinian Territories, economic interdependence and a shared aspiration could enhance the ongoing international effort to ameliorate decades-long tensions. Syria offers an immediate test case as well. When the Assad regime fell in 2025 and the United States and the European Union both lifted sanctions, organizations began to move in, building relationships and supporting the fragile new state’s desire for peace. American companies have established power generation projects, the Gulf states and Turkey have signed dozens of economic memoranda of understanding with the new state, and startups like Behti Betak or nonprofit organizations like the Words of Isa are building grassroots relationships aimed at creating a newly integrated Syria, driving peace across the Middle East. Integration leads to interdependence. Interdependence self-reinforces peace.

Peacebuilding of this sort may be especially critical for Israel and the Palestinian Territories, where conflict and violence have persisted for decades before the Gaza War. Reconstruction and reconciliation efforts require that businesses spread their operations across the divide. Organizations like the Portland Trust, based in the United Kingdom, have focused on the region on the basis that economic co-operation and dialogue between the parties is inseparable from diplomatic peacebuilding efforts. And such economic development (alongside political will) can create hope, ambition, and opportunities for Palestinians. The founding Chief Executive of The Portland Trust, Lord Jonathan Kestenbaum, brings a personal history to the work of reconciliation. His family’s own flight from Nazi persecution ultimately led them to the UK, where he grew up, and whilst a student in London, he was General Secretary (mazkir) of Bnei Akiva UK, a branch of the global youth movement. He then studied at the Hebrew University in Jerusalem in the 1980s completing an MA in education, and thereafter helped to build an international training program for young educators. As a dual national at the time, Kestenbaum was conscripted to military service, with this experience influencing his life-long commitment to reconciliation between Palestinians and Israelis with a particular focus on building bridges through economic co-operation.

Lord Kestenbaum returned home to the U.K. after a few years in Jerusalem and gave up his dual nationality, retaining only British citizenship. He helped found the Portland Trust, and spent many years fostering peace efforts between Israelis and Palestinians. This history gave him a grounding in the region, a commitment to co-existence and a familiarity that exemplifies how peacebuilding through commerce is not abstract policy but is instead built through relationships and real-life experiences. The Portland Trust has to date worked extensively to support Palestinians and Israelis through projects like the Palestinian Agriculture Impact Fund and the building of the city of Rawabi.

Personal experiences bring markets together, and when they come together, they accelerate growth and integration among an increasing number of actors. Each of these actors learns to empathize with their business partners, regardless of historical or political differences. The process reinforces peace, builds harmony, and creates trust. In the case of Israel and the Palestinian Territories, the process is needed alongside reconstruction efforts like Trump’s Board of Peace, which aims to produce lasting peace but has yet to break ground.

Peace is not guaranteed through economics; however, throughout the last century, and in the case of the Asia-Pacific, it has become the most reliable mechanism of sustaining peace, cultivating the types of relationships that grow closer instead of farther apart. Private investment adds a financial tie to the process; however, intentional relationships with an empathetic desire for peace fundamentally secure the process. Southeast Asia’s history, compared to Syria’s cautious reopening or Gaza’s Board of Peace, shows that commerce can lay groundwork that politics otherwise cannot. The region will need institutional support, perhaps even at the level of an ASEAN, but the foundation is growing. More inter-state commerce will bring stronger relationships, paving the way forward to a future of peace, stability, and economic growth.