By His Excellency Satvinder Singh, Deputy Secretary General of the ASEAN Economic Community
Excellencies, Distinguished Guests, Ladies and Gentlemen, a very good morning to you all. Welcome to the 10th AEC Dialogue with a focus on unpacking the Digital Economy Framework Agreement (DEFA).
First of all, I would like to thank everyone here today for your strong support for the ASEAN DEFA. From the attendance today both physically and virtually, it is clear that there is huge interest from businesses and other stakeholders on this issue.
I would like to take this opportunity to thank the Government of Australia for their continuous support of this initiative and Tech for Good Institute for partnering with the ASEAN Secretariat in organising this event.
This is an exciting time for the region. Last September, ASEAN Economic Ministers launched the negotiations on the ASEAN DEFA – the first legally binding region wide digital economy agreement in the world. Tomorrow, the first round of negotiations will kick off, with a view to conclude by 2025.
The DEFA has the potential to bring significant impact that touches the lives of investors, businesses, entrepreneurs, and consumers alike. According to BCG, a robust, advanced, and forward-looking DEFA is expected to add up to USD 2 trillion to the regional digital economy by 2030, reinforcing the region’s dynamism and competitiveness in the global economy.
Google, Temasek, and Bain & Company projected that E-Commerce’s gross merchandise value will grow from USD 112 billion in 2021 to USD 186 billion in 2025. ASEAN’s digital payment market is also expected to grow to USD 2 trillion in transaction value by 2030.
With the rise in the digital economy, let me emphasise that cybersecurity and data protection, along with key elements of the Digital Economy, have become even more important to protect consumers and businesses. Based on current projections, the market volume of cybersecurity in ASEAN is projected to triple from USD 2.1 billion in 2023 to USD 6.7 billion in 2028. Furthermore, the AI market value in ASEAN is projected to triple to USD 27 billion in 2030 from USD 8 billion in 2023.
These figures show that the digital economy is the fastest-growing sector and a key driver of economic growth for ASEAN countries. In this context, DEFA marks a pivotal step for ASEAN in cultivating a robust digital economy. With the DEFA in place, businesses will be able to invest with heightened confidence, while consumers and workers stand to enjoy higher-quality services and increased productivity.
Excellencies, Distinguished Guests, Ladies and Gentlemen, as one of the key beneficiaries of the DEFA, close collaboration with the private sector will be important in order to produce a relevant and forward-looking agreement.
Allow me to share how we envision the role of the private sector during these negotiations:
- First, we need to note the risk of rapid redundancy. Hence, it is important to ensure that provisions are future-proofed and up to date with the current developments. For instance, a provision on emerging issues may be outdated even before the agreement is signed due to rapid technological developments in the digital space. With this in mind, we need to allow for regular interfaces on key topics with the private sector to keep abreast with current practices, and adapt to specific regional situations and emerging trends.
- Second, a common pitfall that we see when negotiating an agreement involves misaligned priorities. To manage this, ASEAN needs to maintain a value-focused and inclusive dialogue that engages both the public and private sectors throughout the process in order to build trust and understand the key concerns of stakeholders. This involves creating a forum or platform for stakeholders to share their perspectives and concerns with a view to working towards achieving a responsive DEFA which will benefit businesses in the region.
- Lastly, factors such as capability gaps, unaddressed technical barriers, and protracted timelines have the potential to hinder the realisation of the full potential of DEFA. In this regard, we need to establish partnerships and leverage the private sector’s strengths and resources to build local capability and technical assistance for the ASEAN DEFA Negotiating Committee as well as relevant agencies in the ASEAN Member States. This is to ensure that we bridge the capability gaps and help countries build their capacity to negotiate and implement the agreement in the future.
Excellencies, Distinguished Guests, Ladies and Gentlemen, the role of the private sector in this negotiation process cannot be overstated. Your active participation and contribution are indispensable in propelling ASEAN towards achieving a robust, advanced, and forward-looking DEFA. Through collaborative partnerships, we can pave the way for a prosperous and resilient ASEAN that not only meets the challenges of today but is well-prepared for the opportunities and uncertainties of tomorrow.
Together, ASEAN can truly flourish as an economic powerhouse in the years ahead. We look forward to your continued support in this endeavour.
Read the 10th ASEAN Economic Community Dialogue press release for more information.
Watch the event recording below: