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ASEAN digital connectivity under Indonesian chairmanship
Harmonizing global principles and frameworks, including data and artificial intelligence (AI) governance and cross-border payment systems, is essential to fostering the digital economy.
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Mobile payment: A micro, small and medium enterprise (MSME) entrepreneur takes a photo of the QR code used for digital payments of his products on Sept. 9, 2023 during the Malang Brewtiful Festival 2023 in Malang Town Square, East Java. (Antara/Ari Bowo Sucipto)
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ndonesia has succeeded in convincing ASEAN leaders to sign a digital economy agreement. The digital economy has been one of the priority issues during Indonesia’s chairmanship of ASEAN in 2023.
The Digital Economy Framework Agreement (DEFA) marks ASEAN members' commitment to spurring economic growth. DEFA aims to harmonize regulations among ASEAN members regarding digital economy development by 2025.
The ASEAN digital economy is estimated to grow to US$1 trillion by 2030. This trend is expected to continue with the growth of e-commerce, e-banking and e-education in ASEAN. As chair of the bloc, Indonesia believes the adoption of digital innovation needs to be strengthened to support the creative economy and small and medium enterprises (SMEs). Furthermore, The World Economic Forum predicts that technological transformation will result in the change of 75 million jobs and 133 million new jobs emerging by 2024.
The total ASEAN population will reach 669 million by 2023, equivalent to 8.34 percent of the world's population, and 440 million people in ASEAN are internet users, contributing further to digital economy growth. This growth will provide several opportunities in the fields of industry, economy and trade, human resource development and capacity building.
Based on data from Bain & Co, Indonesia’s digital economy has reached a value of US$70 billion and is predicted to more than double to $146 billion in the next two years. The digital economy was strengthened by the pandemic, which caused e-commerce in ASEAN to grow by 63 percent. It will continue to strengthen and grow with the introduction of more e-commerce, e-banking and e-education activities.
Most ASEAN countries continue to commit to improving digital infrastructure. In 2022, there were seven ASEAN nations that occupied positions above the average global index for digital infrastructure.
Some countries in the Asia Pacific region are already quite advanced in terms of digitalization, such as Singapore and Malaysia. This can be an incentive for other ASEAN countries to continue to improve digital infrastructure development to create ASEAN digital connectivity.
