Member-economies of the Association of Southeast Asian Nations (Asean) must pursue regulatory reforms on their own digital landscapes first to help the region become a digital economic bloc by 2025, panel speakers at the 14th Asean Leadership Forum said on Friday.
Experts from the Philippines, Cambodia and Malaysia discussed ways by which Asean member states may address limitations to becoming a digital economy—an economy equipped for the future with digital computing technologies, such as e-commerce—going forward.
Southeast Asia is still in the infancy stage in terms of e-commerce. The region is currently seen as a highly attractive market for companies involved in global e-commerce.
However, issues such as limited broadband access, limited financial inclusion for large segments of the population, low level of trust in the security of electronic transactions, and lack of harmonization of regulatory frameworks among member states continue to hinder the development of e-commerce market in the region.
Cielito Habito, professor at the Ateneo de Manila University’s Department of Economics and former socio-economic planning secretary of the Philippines, said better trade facilitation through the use of information and communications technology (ICT) in the region, which involves individual government regulatory reform measures, would ensure growth of small businesses. They, in turn, could promote efforts by the country toward becoming a digital economy.
“For years I see information and communications technology as a possible great equalizer in business, that is for micro, small and medium enterprises to have stronger participation. That is because with ICT, it is a lot easier for small businesses to have access to international markets like the 600-million population of Asean.”
He warned, however, “trade facilitation is going to be a challenge because it involves government regulations, customs procedures that each government has to put in place.”
In particular, this has been a challenge in the Philippines, where the role of MSMEs has been relatively smaller compared with its neighbors in the Asean in terms of their contribution to the creation of jobs, output in relation to gross domestic product, and to exports or trade.
Cambodia Minister of Commerce Pan Sorasok sees a major opportunity for Asean as a whole to become a digital economy and have the potential to be a driver of innovation across the region.
Describing particular constraints in Cambodia to becoming a digital economy, he said, issues and challenges they currently face are inadequate infrastructure for ICT and a lack of financial support for the establishment of e-commerce platforms.
Given such, he urged Asean member-economies to make their e-commerce sector as inclusive as they can be.
“All of us [Asean members] now have e-commerce law, which I call progress, but we have to make sure that activities [in this sector]are fair. I see a lot of activities in the regulatory frameworks region-wise. But on the social side, at least there’s a lot that needs to be done. E-commerce is the catalyst to do things forward,” he said.
From a developed economy’s perspective, Malaysian Minister of International Trade and Industry Dato’ Sri Mustapa Mohamed stressed the importance of aligning public policy with the development of a digital economy.
“The challenge in Malaysia is how to get MSMEs to adopt this platform. Digital economy cannot be achieved unless you address the grassroots issues and change your mindset. Make sure that ICT is also being factored in other sectors as well, like education and health care. Improve internet access in the rural areas,” he said.
The 14th Asean Leadeship Forum themed “Advancing Partnerships, Prospering Together in a New World Economy” was held in conjuction with the 30th Asean Summit hosted by the Philippine government.