Asean aims for $2 trillion digital economy by 2030 with improved rules

Asean aims for $2 trillion digital economy by 2030 with improved rules

Asean Digital Economic Framework

Imagine a world where digital trade seamlessly crosses borders, where cybersecurity is robust, and where payments and data are easily managed. This ambitious vision is what the Association of Southeast Asian Nations (ASEAN) is striving to achieve with the establishment of the ASEAN Digital Economic Framework Agreement. Set to be completed by 2025, this framework aims to enhance digital rules in various key areas, ushering in a new era of technological innovation and economic growth within the region.

ASEAN comprises 10 member states, including Indonesia, Thailand, the Philippines, and Malaysia. Over the weekend, ministerial representatives from these countries gathered in Indonesia’s capital, Jakarta, for the ASEAN Economic Community (AEC) Council Meeting. The discussions focused on boosting regional economic integration and refreshing existing trade processes to ensure a robust future for ASEAN.

The potential impact of a “high-quality” ASEAN digital economy framework is enormous. According to research by the Boston Consulting Group commissioned by the ASEAN member states, the region’s digital economy could double from $1 trillion to $2 trillion by 2030. With a collective GDP forecasted to grow by almost 4.6% annually for the rest of the decade, ASEAN is poised to become the world’s fourth-largest trade bloc by 2030, with a total population of 685 million.

The ASEAN Digital Economic Framework Agreement will not only boost economic integration but also promote responsible and secure digital practices. Cybersecurity is a crucial aspect, and ASEAN has pledged to drive collaboration among member states in adopting common standards and best practices. The trade bloc has also subscribed to the United Nations’ 11 voluntary, non-binding norms of responsible state behavior in cyberspace, emphasizing the importance of a rules-based cyberspace for economic progress and improved living standards.

In addition to cybersecurity, the framework also focuses on facilitating cross-border payments and data flows. Last November, five ASEAN central banks signed an agreement to improve connectivity and enable faster cross-border payments across their markets. This move is seen as vital in driving economic recovery and inclusive growth across the region, as cross-border payment connectivity is essential for facilitating trade, investment, tourism, and other economic activities.

The benefits of the ASEAN Digital Economic Framework Agreement extend beyond large enterprises. Startups and SMBs stand to gain a lot from promoting data free flow with trust, setting high standard digital trade rules, and encouraging consistent regulatory standards across the ASEAN region. Annabel Lee, ASEAN Director for Public Policy at Amazon Web Services, highlights the importance of the cloud in democratizing access to digital technologies and enabling startups and SMBs to thrive.

The logistic industry is another sector that will benefit from the framework. Robert Yap, Executive Chairman of logistics company YCH Group, believes that the agreement will provide Singapore companies with greater transparency and interoperability in cross-border e-commerce and the digital economy sectors. The facilitation of data flows and integration of electronic payments will drive innovation and economic growth, benefiting businesses of all sizes.

The ASEAN Digital Economic Framework Agreement is a crucial step toward building an open, secure, and competitive regional economy. By establishing protocols that ease cross-border digital trade, enhance cybersecurity, and improve payments and data management, ASEAN is positioning itself as a leader in the digital revolution. The potential for economic growth and technological innovation is vast, and the region is well-positioned to seize the opportunities that come with an increasingly digital world.

Through collaboration, forward-thinking policies, and a commitment to responsible and secure digital practices, ASEAN is paving the way for a brighter future. The journey toward a digital economy may still have its challenges, but the ASEAN member states are united in their determination to unlock the region’s potential and create a thriving digital ecosystem that benefits all.