Event Highlights

Prospects for an ASEAN Digital Community

On 29 February 2024, the Tech For Good Institute (TFGI) participated in a seminar, Navigating Global Challenges: ASEAN’s Responses to the Changing Strategic and Economic Landscape, organised by the Centre for Multilateralism Studies, S. Rajaratnam School of International Studies. The panel examined the role of digital integration in realising regional integration for Southeast Asia against a changing strategic and economic backdrop.

Southeast Asia is not only growing economically, it is becoming increasingly important geopolitically in the shifting global system. The seminar organised by the Centre for Multilateralism Studies, S. Rajaratnam School of International Studies, examined how Southeast Asian countries remain globally competitive economically, while working together to maintain strategic autonomy, individually and as a region, in light of uncertain geopolitics, rapid innovations in technology, and the urgent need for energy transition and sustainable development.

The panel “Prospects for an ASEAN Digital Community” discussed the challenges and potential impact of the ASEAN Digital Economy Framework Agreement (DEFA), negotiations for which began last year (2023).

Moderator and Panellists:

Joel Ng, Research Fellow and Deputy Head, Centre for Multilateralism Studies, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore
Ming Tan, Founding Executive Director, Tech for Good Institute
Maria Monica Wihardja, Economist, and Visiting Fellow in the Media, Technology and Society Programme, the Regional Economic Studies Programme and the Indonesia Studies Programme, ISEAS – Yusof Ishak Institute
Ibrahim Kholilul Rohman, Senior Research Associate at the Indonesia Financial Group (IFG) Progress and Lecturer at School of Strategic and Global Studies, Universitas Indonesia

Key Takeaways:

1. Leapfrogging Legacy Technologies and Building a Resilient Digital Community

Southeast Asia has experienced a rapid growth of digital adoption, particularly fueled by mobile technologies and online platforms. However, within this growth, significant challenges such as digital inequality, regulatory gaps and cybersecurity vulnerabilities persist. DEFA therefore needs to balance the dual goals of unlocking the potential of its digital economy and ensuring equitable growth. Success depends on addressing known challenges such as connectivity, cybersecurity, and regulatory alignment, as well as remaining responsive to technological advancement through knowledge sharing, innovation and talent development.

2. Embrace Trade Law 4.0 for Digital Economy Regulation

Transitioning from Trade 2.0 to Trade 4.0 marks a pivotal shift towards regulating the data-driven economy. Unlike traditional trade in physical goods, there is a glaring absence of internationally agreed-upon principles for digital trade and cross-border data flows. The emergence of Digital Economy Agreements (DEAs) and frameworks like DEFA underscores the necessity for regulatory frameworks tailored to the digital era. With the exponential growth of the digital economy outpacing traditional sectors, the absence of comprehensive governance could impede productivity, innovation, and cross-border access to vital information. Therefore, embracing Trade Law 4.0 is imperative to establish transparent, non-discriminatory regulations that foster predictability and facilitate cross-border data flows essential for economic growth and societal progress.

3. Address Digital Divide for Equitable Growth
Despite the promising growth prospects of the region, the panel identified several challenges and risks associated with ASEAN’s digital transformation. Digital inequity stands as a significant concern, threatening to widen the gap between ASEAN member states (AMS) as well as within countries. As digital natives increasingly dominate online spaces, equitable growth hinges on ensuring inclusive access to digital technologies, digital literacy and opportunities to benefit from technology-enabled business models. Cybersecurity threats, workforce disruptions, and environmental impact pose significant hurdles to sustainable digital development. By fostering a regulatory environment prioritising digital inclusion, ASEAN can mitigate disparities and foster resilient, innovative growth across the region.

4. Align Policies for MSMEs’ Digital Transformation

Micro, small, and medium enterprises (MSMEs) constitute the backbone of ASEAN’s economy, yet digital adoption among them lags behind that of their larger counterparts. Aligning policies, including infrastructure development, digital taxation, and data protection, is crucial to unlocking the potential of MSMEs in the digital economy. Establishing common definitions and frameworks for MSMEs across ASEAN nations facilitates comparative analysis and promotes policy coherence. Furthermore, building digital trade relationships with strategic partners and leveraging online platforms can empower MSMEs to access global markets and drive economic growth.

5. Keep Implementation Challenges Front of Mind

The goal of DEFA is not just to promote intra-ASEAN interoperability, but to make ASEAN a globally competitive region with multiple strategic partners. This will only be possible with collaborative action in guiding the region’s digital integration efforts. Governments, businesses, civil society organisations, and academia must work together for capacity building and technical assistance to secure domestic buy-in and translation from policy to practice.