Common regulations key to driving digital economy in Asean

  • Regulations should flow across all sectors, including the financial sector
  • Malaysia can easily exceed digital economy targets, says Microsoft Malaysia

 

Common regulations key to driving digital economy in Asean

 

THERE is little doubt that Asean as a region has huge potential, given its population (over 630 million currently) and the fact that it has over 700 million Internet connections.

Governments such as those of Singapore, Malaysia and Indonesia have announced plans to capitalise on the digital economy wave to drive their economies forward.

While this is all well and good, the reality is that different Asean countries have different regulations and are at different stages of development in growing their digital economies. With this in mind, the recently-released report by the US-Asean Business Council and Deloitte have made recommendations on what needs to be put in place to advance the digital economy in the Asean region.

Titled ‘The Digital Economy and The Free Flow of Data: Advancing the Asean Economic Community’, the report highlights how Asean member states can advance their digital economies and the Asean Economic Community through pro-growth digital data management policies. (To read the full report, click here.)

“I think one of the overarching recommendations of the report is that we would like Asean to treat the digital economy as an Asean-wide phenomenon, and not to have separate regulations and different standards all over Asean,” Ambassador Michael Michalak, senior vice president and regional managing director of the US-Asean Business Council told reporters during a media briefing on Jan 18.

“We would like to see Asean governments working with the private sector, to develop an Asean-wide Internet regulatory system that allows for free flow of data, and that removes barriers to the kind of infrastructure that we need to take full advantage of the digital economy,” he said.

He explained that regulations should flow across all sectors, including the financial sector for payment systems, the Internet sector itself for having backbone and infrastructure and the logistics sector so deliveries can be done in a swift and sure basis.

“All of these things need to be approached on a holistic basis and we are trying to alert Asean to the fact that doing it as Asean is going to make Asean much more competitive and a real player in the digital economy in the future,” Michalak said.

He noted that the introduction of the mobile phone has been a revolutionary change in the economies of countries all over Southeast Asia.

“It has improved financial inclusion so people who never had a bank account before now have bank accounts, they now know what credit cards are, it helps them to stay connected and make their life easier. It (mobile connectivity) also makes governments’ lives easier; it removes the middle person in transactions so it cuts down on corruption. So actually, the Internet, the mobile phone, the way in which the new generations have adapted swiftly and completely to this new society has revolutionised the economy.”

Commenting on the progress of Malaysia’s digital economy, Jasmine Begum, director of legal, corporate and government affairs and at Microsoft Malaysia and new markets, highlighted that the digital economy of Malaysia currently contributes 16.8% to its gross domestic product (GDP).

“The government has projected a 20% contribution to GDP by 2020. I think we will easily exceed those numbers,” she said.

To a question on what factors will drive this, Yasmin highlighted that increasingly, trade routes have become digital.

“With these new trade routes you have a generation of people who click and buy, it’s a generation that has been born into a ‘touch generation’, swipe economy. With the millennials coming into place, the country has between 75% and 80% connectivity with broadband penetration, I think that will drive that.”

Apart from consumer behaviour, she said the policies that have been put in place are also a driving factor. She commended the prime minister for announcing that this is the year for the Internet economy.

“I think we are one of the first countries in Asean to make such a big announcement, which in itself is forward-thinking.”

She also commended the local startup scene for contributing to the growth of the digital economy. “Today’s young graduates are into the notion of startups and these startups innovate and go abroad and that shows a shift in the mindset too.” 
 
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