Southeast Asia’s digital economy continues its impressive digital economy growth. At its current rate, the region’s digital economy is expected to deliver US$1 trillion in value by 2030. This growth however is happening against a backdrop of diverse digital maturity levels and governance approaches across the region. To further accelerate this growth, it is important to have a framework that aligns initiatives and efforts of AMS to achieve a more digitised, digitalised, data-driven and digitally-integrated region.
This is why the ASEAN Digital Economy Framework Agreement (DEFA) is important. It seeks to further enable the development, adoption and governance of technology and technology-enabled business models with a regional approach. The DEFA seeks to strengthen ASEAN’s competitiveness, advance economic development for all ASEAN Member states, and make progress toward national, regional and global sustainable development goals through digital integration.
This report synthesises insights from the 10th ASEAN Economic Dialogue: Unpacking ASEAN’s Digital Economy Framework Agreement, organised by the ASEAN Secretariat, with support from the Australian Government through the Australia for ASEAN Futures – Economic and Connectivity (Aus4ASEAN Futures (ECON)), and with the Tech for Good Institute (TFGI) as a knowledge partner. The dialogue encompassed insights from international organisations, governments, businesses, civil society organisations, research institutes and academia.
Regionally, there have been numerous efforts to achieve regional integration through specific aspects of digital integration.
Multiple initiatives have been put in place and are examples of ASEAN’s efforts to chart pathways to create an interoperable and integrated digital economy in the region. It also complements existing trade agreements, such as the ASEAN Free Trade Agreement and the Regional Comprehensive Economic Partnership (RCEP) Agreement, which seeks to further bolster trade, increase market access and attract investments in Southeast Asia. Hence, while the beginning of negotiations for the DEFA is an important milestone, progress made by ASEAN on various agreements and frameworks serves as a strong foundation for success.
The framework agreement is grounded on several key principles as identified in the Boston Consulting Group & Aus4ASEAN Futures (ECON) 2023 study on DEFA:
- Impact First: Solve the urgent and pressing needs to boost growth, well-being and resilience.
- Inclusive Growth: Drive substantial and sustainable growth for all AMS.
- Build on Progress: Leverage existing commitments and advancements made by ASEAN.
- Forward-Looking: Respond to and accommodate the evolving digital landscape and broader ASEAN goals.
- Tangible Benefits: Deliver real benefits for the economy and its citizens.
The private sector, think tanks, civil society and academia expressed interest to support AMS governments to co-create a quality framework agreement that is fit for purpose and future-proof. Digital economy stakeholders noted the need for DEFA to equitably distribute benefits across all countries, sectors and individuals. In addition, the DEFA should strive to be an agreement that is evolving, forward-looking, agile and flexible enough to accommodate new technologies. A trusted free flow of data is also one of the key considerations to further accelerate the region’s growth. Finally, developing tech talent in the region is seen as an important factor to make the region an attractive investment destination.
The path towards digital integration is not only a job for governments. Expertise and perspectives from the private sector and academia can help support and inform the negotiation process, as well as garnering support for capacity-building and implementation. Creating opportunities for multi-stakeholder consultations and listening sessions for each negotiating round would ensure that provisions in the agreement are fit for purpose, future-proof, responsive, responsible and flexible.
This publication aims to serve as a valuable resource for stakeholders seeking to contribute to ongoing discussions regarding the next phase of Southeast Asia’s digital trajectory. It also advocates for ASEAN to empower these stakeholders to support the process of shaping and realising a landmark digital economy agreement for the region.