Minister S. Iswaran on the economic future of ASEAN and Singapore’s vision for digital economy
Today, ASEAN is the 6th largest economy in the world, with a combined GDP of US$2.55 trillion and a collective market of more than 600 million consumers. Some experts see ASEAN potentially becoming the 4th largest single market in the world by 2050, after the EU, US, and China.
At the Asia Business First Forum 2018, Singapore Minister for Trade and Industry (Industry) Mr S. Iswaran shared how Singapore will advance ASEAN’s shared interests to grow e-commerce and digital economy under its ASEAN Chairmanship this year.
Technology as a global trend
Minister S. Iswaran named the emergence of digital economy a major trend that has been rapidly changing the nature of economic activity. Such trend is enabled by the advancement of technology which has now become a key driver of competitive advantage for businesses.
The ASEAN digital economy has the potential to grow to an estimated value of US$200 billion by 2025, with e-commerce accounting for US$88 billion.
“More significantly, the digital economy can unlock the potential of SMEs across ASEAN; it affords an unparalleled opportunity for the smallest enterprises to access the most distant markets with relative ease,” Minister said.
“Therefore, if ASEAN governments support and harness digital connectivity, and ASEAN businesses keep pace with the shift towards digitalisation, the pay-offs will be significant,” he emphasised.
Digital economy as a focus of Singapore’s Chairmanship of ASEAN
ASEAN is a valuable platform that allows its member countries to bring together the region’s collective efforts and resources to secure coherent and substantive outcomes.
However, ASEAN will need to address the challenges posed by the digital economy, such as cross-border data flows, regional e-payments network, trade architecture update to support the digital economy.
According to Minister S. Iswaran, in its Chairmanship of ASEAN this year, Singapore is committed to deepen ASEAN’s digital connectivity to position it for the growing opportunities in innovation and the digital economy and to meet future challenges.
(1) ASEAN Agreement on e-Commerce
Singapore is working with ASEAN Member States on specific initiatives such as an ASEAN Agreement on e-Commerce that advances trade rules in e-commerce, lowers businesses’ operating barriers to entry, and builds up greater digital connectivity, to facilitate e-Commerce flows in the region.
This will provide a platform for aspiring entrepreneurs, start-ups and Micro, Small and Medium Enterprises (MSMEs), to market their products and services regionally, while making it easier for them to send and receive electronic payments.
(2) Framework to monitor ASEAN digital integration
Singapore is working with its ASEAN neighbours to develop a framework to monitor the progress of ASEAN’s digital integration.
“This will help ASEAN to assess and benchmark our digital ecosystem and identify how we can empower all stakeholders to benefit from ASEAN’s digital integration initiatives and efforts,” Minister said.
(3) ASEAN Innovation Network
Singapore is also working on an ASEAN Innovation Network. The Network seeks to strengthen the linkages between innovation ecosystems in ASEAN member states to spark new collaborations and solutions, which can address the demand from an increasingly sophisticated and growing consumer base in the region.
(4) ASEAN Smart Cities Network
At the same time, the ASEAN Smart Cities Network is also being developed to facilitate cooperation on smart cities development, catalyse bankable projects with the private sector, and to secure funding and support from ASEAN’s external partners.
(5) Facilitative trade architecture
Minister S. Iswaran pointed out that these initiatives need to be complemented with a facilitative trade architecture in order to deliver tangible benefits for businesses.
Singapore is therefore also pursuing an array of initiatives, including the full implementation of the ASEAN-wide Self Certification, a pathfinder for an ASEAN-wide Authorised Economic Operators Mutual Agreement, ASEAN Single Window, ASEAN Trade in Services Agreement, and an enhanced ASEAN Comprehensive Investment Agreement.
“These initiatives will facilitate the seamless movement of goods within ASEAN, reduce administrative burdens and costs for businesses especially SMEs, and improve the region’s regulatory regime for trade in services and investment,” Minister said.
Outlook for ASEAN
Given the region’s youthful population, growing middle class and increasing urbanisation, Minister S. Iswaran is optimistic about the outlook for ASEAN.
He commented that the realisation of the ASEAN Economic Community (AEC) in 2015 has created a relatively seamless business operating environment by reducing trade barriers, enhancing market access, improving trade rules, and creating more overseas opportunities for our businesses.
Minister attributed ASEAN’s achievements to the commitment to keep markets open and perseverance in deepening economic integration. However, he also cautioned the challenges that ASEAN face, under the current global economic environment, such as the rise of anti-trade sentiments, protectionist rhetoric, and doubts over the benefits of globalisation.
“Against the backdrop of the current global economic landscape, ASEAN must resist the tendency to look inwards, and draw on its shared vision and collective strength to stay resolute in its commitment to regional economic integration,” he cautioned.
To continue with its next phase of economic integration under the AEC 2025 Blueprint, Minister said “ASEAN must remain united, relevant, resilient and innovative by responding to changing global economic trends and harnessing emerging opportunities, even as it deepens regional integration”.
“It is only through a sustained effort to build a competitive, resilient and innovative region that ASEAN can anchor its relevance on the global stage. Positioning ourselves well to tap into the new opportunities of the digital economy and other emerging technologies will further reinforce ASEAN’s value proposition and ensure a united and prosperous future for our businesses and our people,” he concluded.