Shopping can be as simple as a few simple taps on the phone nowadays. Digital technology developments have made it easier for people to do more things online. The recent COVID-19 pandemic has emphasized the need for resilient economic systems against possible crises. In ASEAN, countries are committed to strengthening regional cooperation with the ASEAN Digital Economy Framework Agreement.
The COVID-19 aftermath
When the COVID-19 pandemic forced the world to stay home and avoid contact with others, people had to scramble for alternatives to continue living. Digital technologies have emerged as the primary alternative for no-contact purchases, sales, and other transactions. As the fifth largest economy in the world, ASEAN has enormous potential to develop and scale up its digital economy.
Integrating digital technologies into ASEAN economies requires a clear and inclusive framework to ensure every ASEAN Member State can participate. A policy brief by Mima Sefrina from the Economic Research Institute for ASEAN and East Asia (ERIA) shares insight on understanding the ASEAN Digital Economy Framework Agreement. The agreement aims to align digital trade rules and regulations and establish digital economy-related cooperation in ASEAN.
ASEAN digital economy
ASEAN digital economies grew during the COVID-19 pandemic. The number of online consumers in Southeast Asia rose from 290 million pre-pandemic to 350 million users in early 2021. Merchants began to adopt online services, including groceries and food delivery. The development of digital payment methods, which allows people to pay without having to put out actual cash, also followed suit as the popularity of e-commerce rises.
The policy brief notes that though all are experiencing growth, ASEAN countries have different readiness levels in digital economies integration. Based on the ASEAN Digital Integration Index (ADII), Singapore is cited as the most prepared country, followed by Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. It is crucial to understand the gap in digital infrastructures, development, and readiness in each country to ensure the integration of just and inclusive digital economies in ASEAN.
There are abundant opportunities for ASEAN digital economies, and the leaders have committed to developing the region’s cooperation. To begin, they signed the Bandar Seri Begawan Roadmap in 2021, a roadmap covering digital interoperability in digital trade, digital payments, and the digital economy to establish the ASEAN Digital Economy Framework Agreement (DEFA).
Key elements for ASEAN DEFA
The first negotiation for DEFA was initially set for 2025. However, the recent development has brought the date up to the later quarter of 2023. By signing the DEFA, ASEAN leaders will establish the foundation for digital economy interoperability within the region. The brief shares three ways to determine key elements to be incorporated into the DEFA:
- Go through the existing initiatives relevant to the digital economy, from agreements, master plans, and work plans.
- Analyze the data findings in the ASEAN Digital Integration Index to ensure each country’s readiness.
- Conduct a comparative study on the existing digital economy agreements considering the ASEAN contexts.
Read the full policy brief here.
Editor: Nazalea Kusuma
Madina is the Assistant Manager for Program at Green Network Asia. She is an English major graduate from Universitas Indonesia with two
years of demonstrated experience in editorial and creative writing,
researching, editing, and creating content.