Indonesia is leading the ASEAN Digital Community
As ASEAN Chair, Indonesia has consistently been ambitious. ASEAN launched the ASEAN Community in 2003, followed by the Regional Comprehensive Economic Partnership (RCEP) in 2011. It is not surprising that Indonesia, as this year's ASEAN Chair, has lofty goals. By launching the ASEAN Digital Economy Framework Agreement, Indonesia hopes to bring ASEAN closer to a single regional digital community (ASEAN DEFA).
ASEAN has made significant progress in establishing this digital community. The ASEAN Digital Ministers most recently adopted the Boracay Digital Declaration, "Synergy Towards a Sustainable Digital Future," on February 9-10, 2023. The Declaration, which is guided by the ASEAN Digital Masterplan 2025 and the Bandar Seri Begawan Roadmap, recognizes the the importance of a digitally inclusive society by addressing the digital divide; a trusted, secure, and safe digital market by implementing necessary digital data governance such as data management, cybersecurity, and AI governance; and people-centered digitalized government.
Under Indonesia's chairmanship, ASEAN will complete its feasibility study for the ASEAN DEFA and begin negotiations for a 2025 conclusion. DEFA is modeled after so-called "digital-only" agreements (digital economy agreements or DEA). Unlike traditional trade agreements' digital provisions, which typically focus on market access, DEAs aim to facilitate cross-border collaboration on broad issues such as cross-border data flows, personal data protection, AI governance, and digital ID systems. Singapore is currently the only ASEAN member state (AMS) to have signed DEAs: it has DEPAs with Chile and New Zealand, the Singapore-Australia DEA, the United Kingdom-Singapore DEA, and the Korea-Singapore Digital Partnership Agreement.
The vast disparity in AMS readiness for true region-wide digital integration is a major impediment to achieving an ASEAN-wide digital future and a high-standard DEFA. The ASEAN Digital Integration Index assesses six dimensions of digital integration readiness at the country level: digital trade and logistics, data protection and cybersecurity, digital payments and identities, digital skills and talent, innovation and entrepreneurship, and institutions and infrastructure. Malaysia and Singapore scored higher than the regional average in all six dimensions in 2021, while Cambodia, Lao PDR, and Myanmar did not. Meanwhile, the scores for Indonesia, Thailand, Vietnam, the Philippines, and Brunei Darussalam were mixed.
As the Index indicates, ASEAN's regulatory framework for data safeguards remains unevenly regulated. Singapore, Malaysia, and the Philippines, for example, were early adopters of personal data protection legislation, while Thailand and Indonesia did not do so until 2022. Vietnam plans to enact a data privacy law by 2024. Aside from data protection, there are regulatory differences in de minimis provisions (the minimum value of goods below which no tariffs or taxes are collected at borders), taxation, subsidies, industrial policy, competition or antitrust policies, and localization data.
This disparity also exists in countries with lower levels of development, such as Indonesia. In July 2022, an opinion poll conducted by the ISEAS-Yusof Ishak Institute and the Indonesian Survey Institute (LSI) confirmed the findings on Indonesia's digital divide. According to the survey, this divide is especially pronounced among populations with varying levels of education. For those with a primary education or less, less than a third and less than 10%, respectively, access the internet via mobile broadband and fixed broadband. In stark contrast, 92% and more than one-third of those with a university or equivalent education, respectively, use mobile and fixed broadband for internet access.
ASEAN could focus on the three key areas and action plans outlined below to achieve a sustainable digital future.
First, create a trustworthy and integrated digital market. In a more integrated regional digital economy, ASEAN could prioritize setting standards for data safeguards and harmonizing regulations to ensure a fair distribution of benefits across all AMS and all types of enterprises. ASEAN could provide capacity-building and technical assistance to AMS that is falling behind. To begin, ASEAN plans to deliver three concrete outcomes under Indonesia's Chairmanship: an ASEAN QR code as a common digital payment and currency, a digital lending platform for matching potential investors and lenders, and Wiki Entrepreneurs as a one-stop digital platform for ASEAN micro and small enterprises.
Second, we must create a digitally inclusive society. ASEAN could prioritize accelerating universal access to digital connectivity (particularly for 4G networks and fixed broadband) and preparing current and future workers for fast-changing digital transformations, while also ensuring that existing labor laws, definitions, and standards are well suited to the changing nature of jobs. ASEAN could also develop standards for consumer rights and protection that are interoperable across ASEAN. Given the concerns about the effects of digital transformation on mental health, ASEAN may consider developing a mental health charter.
Third, create a digitalized government service delivery system. ASEAN could prioritize the development of a digital ID system for all AMS, with the goal of achieving regional interoperability for national ID systems. ASEAN could strive for mutually recognized electronic identification, similar to the EU's eIDAS (Electronic Identification, Authentication, and Trust Services) system, and work toward implementing the Once-Only Principle (OOP). With such an integrated ID system in place, an ASEAN citizen would be required to provide certain standard identification information to regional authorities and administrations "only" once. ASEAN could also establish a standardized digitalized Public Service Delivery (PSD) platform. Finally, citizen e-participation could function as a feedback mechanism.
Given that the digital future is right on our doorstep, Indonesia's ambitious plan to launch the ASEAN DEFA and move closer to an ASEAN digital future is commendable. There have also been discussions about establishing an ASEAN Digital Community by 2040. To carry out its plans, Indonesia's ASEAN Chairmanship could focus on concrete deliverables, such as the ASEAN QR code, in the short run, while laying the groundwork for future ASEAN chairs to push ahead with a trusted and integrated regional digital market, more inclusive digitally connected societies, and digitalized government systems in the long run. ASEAN may be forced to set short-term goals in order to meet more difficult long-term goals, such as regional interoperability for national ID systems. Domestic obstacles, particularly Myanmar's intractable civil war, as well as broader geopolitical realities, particularly the US-China technological divide, will pose serious risks to ASEAN's digital integration.
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