ASEAN accelerates digital transformation.

SGGP 06/06/2023 07:05

According to CNBC, the Association of Southeast Asian Nations (ASEAN) now has the potential to become a digital economy : a young, tech-savvy population with over 400 million digital consumers and increasing internet penetration.

ASEAN has internet coverage exceeding 70%. Photo: CNBC

Advantages and distance

According to the latest e-Conomy SEA 2022 report published by Google, Temasek, and Bain & Company, the digital economies of six countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam – are projected to grow at 6% per year.

However, a digital divide still exists between countries and within countries. Anthony Toh, a research analyst at Nanyang Technological University, Singapore, stated: “The reason behind this uneven development is the unequal distribution of digital economic benefits, as countries are at different stages of developing their legal frameworks, plus the urban-rural gap in digital literacy levels. Therefore, detailed research, forward-looking policy planning, and significant support from regional stakeholders are needed.”

Kenddrick Chan, a fellow at the Portulans Institute, an independent research institute based in Washington, D.C., commented: “Although ASEAN has over 70% internet coverage and most of its population owns smartphones, it remains heavily reliant on social media. Therefore, adoption across the entire digital economy requires more digital literacy.”

Target $1.2 trillion

ASEAN will enhance the use of digital technology to expand trade and strengthen economic cooperation among its 10 member countries. Auramon Supthaweethum, Director-General of the International Trade Negotiations Department at the Thai Ministry of Commerce, stated that ASEAN will also continue trade negotiations with six “dialogue partners” to establish new free trade agreements (FTAs) or expand existing ones. ASEAN aims to increase intra-ASEAN trade to US$1.2 trillion by 2025. Ms. Auramon affirmed that senior economic officials from ASEAN and its dialogue partners – including the US, China, Japan, South Korea, India, and Canada – met in Jakarta, Indonesia, to discuss and will submit a report on the progress of FTA negotiations before the ASEAN Economic Ministers' Meeting in August.

Meanwhile, Mr. Duangarthit Nidhi-u-tai, Deputy Director of the International Trade Negotiations Department, Ministry of Commerce of Thailand, emphasized that the focus of last month's negotiations in Jakarta was on the goals to be completed in 2023, including concluding the ASEAN-Australia-New Zealand FTA negotiations, implementing the Regional Comprehensive Economic Partnership Agreement, and establishing a framework for the ASEAN Digital Economy Agreement so that leaders can announce the start of negotiations on this agreement this year. In addition, the parties also discussed measures to expedite internal processes so that member countries can sign completed economic agreements, such as the Protocol amending the ASEAN Framework Agreement on the Movement of Natural Persons and the ASEAN Food Security Legal Framework; Simultaneously, negotiations to strengthen the ASEAN Trade in Goods Agreement were promoted, with a progress report scheduled for August. According to Mr. Duangarthit, FTA negotiations between ASEAN and China, India, and South Korea have made significant progress, while discussions with Canada are continuing.

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