Wednesday, April 24, 2024
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Towards inclusive digital transformation

Izah Azahari

The most prominent and widely discussed topics of the current times revolve around one ubiquitous word: digital. Virtually every aspect of our thoughts, observations, expressions, and actions is intricately intertwined with the digital realm. Our lives have been thoroughly permeated by the all-encompassing influence of digital technology in this era.

These insights were articulated by the Secretary General of the International Economic Association (IEA) and Lead Advisor of the Southeast Asia Region at the Economic Research Institute for ASEAN and East Asia (ERIA) Lili Yan Ing, along with Trade Specialist at ERIA Yessi Vadila.

Together, they have co-authored an enlightening op-ed piece titled ‘ASEAN Digital Community (ADC) 2045,’ highlighting the transformative potential of digital advancements in the ASEAN region.

The writers noted that one important issue among the 125 articles of the ASEAN Chairman’s Statement during the ASEAN Summit that was held on May 9-11 is Article 60, which states, “… with a view of achieving inclusive digital transformation toward an ASEAN Digital Economic Community 2045”.

Another ASEAN Summit is scheduled on September 5-7 later this year.

The writers urged people to pause for a moment to contemplate the significant role played by the ASEAN Summit in shaping the future of ASEAN, where, in 2003, ASEAN took a momentous step by collectively committing to establish the ASEAN Economic Community (AEC) by 2020, a target that was later accelerated to 2015. Furthermore, in 2011, ASEAN made a pivotal decision to solidify its integration efforts in East Asia through the establishment of the Regional Comprehensive Economic Partnership (RCEP).

This landmark agreement encompasses the 10 ASEAN member countries along with their five key trading and investment partners. Together, these 15 nations constitute a staggering one-third of the global population.

The significance of the RCEP goes beyond sheer numbers. The participating countries, including the ASEAN member states, account for 30 per cent of global gross domestic product (GDP), 27 per cent of global trade, and 30 per cent of global foreign direct investment (FDI).

The writers noted that such figures firmly establish the RCEP as a formidable economic bloc, steadily augmenting its influence within the global economic landscape.

Delving deeper into the rationale behind the establishment of the ASEAN Digital Community 2045, the writers touched on the complex history of colonisation and imperialism experienced by Southeast Asian countries, spanning several centuries until the 20th Century.

Although these nations have gained independence, they continue to grapple with the lasting impacts of the past, including economic inequality, political instability, and social conflicts. Given this historical backdrop, it becomes crucial for ASEAN to maintain its status as a “peace region” by remaining neutral and achieving political and economic independence.

By drawing lessons from the past, ASEAN member countries can effectively address present challenges and collaboratively build a more equitable and prosperous future for their people. The ASEAN Digital Community 2045 serves as a strategic initiative to facilitate this collective effort.

Moving on to their third point, the current geopolitical landscape is marked by escalating tensions, necessitating a shift towards a multipolar paradigm. The dominance of a single hegemonic power has proven unsustainable for global development.

This shift presents an opportune moment for rising middle-power countries like Brazil, South Korea, South Africa, and Southeast Asian nations to assume a more significant role in the dynamically evolving multipolar global community.

The growing power of these emerging economies should not be underestimated, as globalisation fosters interconnectivity and bilateral trade relationships with middle-power countries. It is imperative for these nations to leverage their increasing economic and political influence to foster greater cooperation and collaboration within the international community. The rise of middle-power countries brings forth the potential for more sustainable and equitable development, along with inclusive growth, benefitting a broader spectrum of society.

Considering these three reasons, the writers explained ASEAN’s relevance both politically and economically cannot be understated, particularly with its young and dynamic population. Embracing digital innovation while emphasising key human capital development, including inclusivity for women, youth, and people with disabilities, will be one way to increase ASEAN’s relevance in the global economy. Digital innovation is poised to revolutionise not only our work environments but also our lifestyles and the entire economic system. In recent decades, digital technologies have significantly enhanced connectivity, financial systems, and access to trade and public services.

This transformative shift has not only changed the nature of goods and services trade but also the way in which they are traded. The digital economy is experiencing rapid growth, further accelerated by the global pandemic. Digital trade, encompassing digital payments and service delivery, reached a value of USD4.9 trillion in 2021 and is projected to surpass USD10 trillion by 2030.

In the ASEAN region, digital trade is expected to reach USD360 billion by 2025 and USD1 trillion by 2030, accounting for 10 per cent of the global digital trade market by 2030 (Statista, 2022).

Further highlighting their points, Lili Yan Ing and Yessi Vadila said the rise of digital innovation is evident in the exponential growth of e-commerce, digital payments, and the emergence of new business models, profoundly reshaping the entire economic landscape.

Digital technologies and innovations are not mere passing trends; they represent a fundamental shift that will continue to shape our lives for decades to come.

Through strategic efforts, ASEAN can fully harness the potential of the digital economy, fostering new opportunities for growth and development within the region.

As the increasing adoption of automation, artificial intelligence (AI), and other advanced technologies is redefining the nature of work, opening up new employment prospects and boosting productivity, the writers noted how these technologies operate at faster speeds with greater precision and accuracy, leading to reduced production and operational costs.

Citing a 2017 report by PwC, the writers underlined the widespread usage of automation and AI that is projected to contribute an estimated USD15.7 trillion to the global economy by 2030.

They believe that the upcoming ASEAN Chairmanship of Indonesia in 2023 holds significant importance for the region, as it will set the tone and direction for ASEAN’s future.

By reaffirming the centrality of ASEAN and embracing digital innovation as a catalyst for an inclusive digital transformation, culminating in the ASEAN Digital Economic Community 2045, the region can stride toward a more prosperous and resilient future.