The measures taken by ASEAN to establish confidence in its digital economy

The unity of ASEAN is based on a shared vision, shared identity, and shared community. However, this unity is being disrupted by the turbulence brought on by the Fourth Industrial Revolution, the fast pace of digital transformation, and the challenges presented by geopolitics and economics.

Building more trust among member countries of ASEAN in its policies and goals is crucial for its advancement and goal of establishing a community of equal opportunities. One significant opportunity lies in the digital economy, which is projected to expand from around US$300 billion to nearly US$1 trillion by 2030.

The ASEAN region is experiencing rapid growth, with the average real GDP expected to increase by 4.6% in 2023 and 4.8% in 2024. It is predicted to become the fourth-largest economy globally by 2030. This growth is fueled by a population of 700 million, which consists of young, educated individuals who are increasingly connected online, and a burgeoning middle class.

The incorporation of digital technologies into the daily lives of people in the region, particularly the younger generation, has transformed their methods of accessing information, purchasing products and services, utilizing financial facilities, and engaging with the government.

Governments in the entire region have acknowledged the significance of utilizing the continuous digital transformation for positive outcomes and have implemented policies to support a prosperous digital economy in the region. However, the varying socio-economic conditions, different levels of development, and diverse regulatory systems pose as obstacles to this endeavor.

There are various methods, such as the ASEAN Digital Masterplan 2025 and the Bandar Seri Begawan Roadmap, that can be used to deal with these challenges in an effective way. These tools involve policy measures, regulations, and laws that are essential in addressing the issues at hand.

The masterplan has been created to give a glimpse into the future of ASEAN’s digital society and economy. Meanwhile, the roadmap outlines a strategy for the region’s digital transformation agenda, aiming to speed up the integration of its digital economy by implementing the ASEAN Digital Economy Framework Agreement (DEFA).

Having a clear vision and plan, the ASEAN DEFA has the capability to bring about significant changes in the region. Being the first-ever digital economy agreement covering the entire region, it could serve as a model for achieving unity and coordination among nations that are at various levels of digital integration.

Moreover, ASEAN is empowered to formulate a consensus that is suitable for all member states (AMS), accounting for their varying degrees of socio-economic growth, instead of relying on modals adopted from different regions worldwide.

Some of the subjects that will be discussed during negotiations include digital trade, international e-commerce, safeguarding against cyber threats, protecting online users, utilizing digital identification, digital payment systems, managing data transmission, promoting fair competition, developing digital skills and encouraging talent mobility, and exploring new fields like artificial intelligence.

AMS acknowledges the significant economic opportunities that can be obtained from the digital economy and believes that embracing digital transformation is crucial for achieving economic expansion and success.

AMS are creating trust for both businesses and investors in an inclusive and sustainable ASEAN digital economy by participating in DEFA negotiations, thereby opening avenues for economic growth, job generation, and investment prospects.

If the ASEAN DEFA is carefully designed to include everyone, it will establish a setting that empowers and links up micro, small, and medium-sized enterprises (MSMEs) to markets both regionally and globally. It will also support the development of digital skills, generate good quality job opportunities for various groups such as women, youth, and rural communities, and enhance both collective and individual economic competitiveness and resilience.

It is encouraging to see the initial advancements made in this area. Countries within the subregion are already working together to make cross-border digital payments easier. Thailand and Singapore have led this effort with their PromptPay and PayNow systems, which allow for instant and affordable mobile transfers by simply using the recipient’s phone number.

This highlights the potential of what can be achieved, and as ASEAN begins talks on the ASEAN DEFA, it is crucial to employ an open and inclusive approach to seek input from all parties. This approach will foster confidence in the development of an inclusive and long-lasting ASEAN digital economy.

In order to make these transitions easier, the World Economic Forum, in collaboration with the ASEAN-Korea Cooperation Fund, has introduced the ASEAN Digital Economy Agreement Leadership (ASEAN DEAL) initiative.

The main objective is to assist AMS in being prepared, tackling difficulties, and gaining advantages from digital economy agreements. This is accomplished by offering activities to enhance capabilities, a digital repository of economy agreements online, and conducting annual business surveys and discussions on digital economy matters. Additionally, the project involves gathering input from various stakeholders like academia, civil society, the private sector, and regions that have successfully implemented digital policies for negotiation purposes.

To enhance competitiveness in the global economy and offer more opportunities to its people, ASEAN aims to establish a robust integrated digital economy. This will necessitate cooperation among member countries, but in return, it will promote higher levels of trust and, if successful, contribute to the ultimate goal of a stronger and more unified ASEAN.

(Asia News Network)