• Home
  • About RSIS
    • Introduction
    • Building the Foundations
    • Welcome Message
    • Board of Governors
    • Staff Profiles
      • Executive Deputy Chairman’s Office
      • Dean’s Office
      • Management
      • Distinguished Fellows
      • Faculty and Research
      • Associate Research Fellows, Senior Analysts and Research Analysts
      • Visiting Fellows
      • Adjunct Fellows
      • Administrative Staff
    • Honours and Awards for RSIS Staff and Students
    • RSIS Endowment Fund
    • Endowed Professorships
    • Career Opportunities
    • Getting to RSIS
  • Research
    • Research Centres
      • Centre for Multilateralism Studies (CMS)
      • Centre for Non-Traditional Security Studies (NTS Centre)
      • Centre of Excellence for National Security (CENS)
      • Institute of Defence and Strategic Studies (IDSS)
      • International Centre for Political Violence and Terrorism Research (ICPVTR)
    • Research Programmes
      • National Security Studies Programme (NSSP)
      • Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
    • [email protected] Newsletter
    • Other Research
      • Future Issues And Technology (FIT)
      • Science and Technology Studies Programme (STSP) (2017-2020)
  • Graduate Education
    • Graduate Programmes Office
    • Overview
    • MSc (Asian Studies)
    • MSc (International Political Economy)
    • MSc (International Relations)
    • MSc (Strategic Studies)
    • NTU-Warwick Double Masters Programme
    • PhD Programme
    • Exchange Partners and Programmes
    • How to Apply
    • Financial Assistance
    • Meet the Admissions Team: Information Sessions and other events
    • RSIS Alumni
  • Alumni & Networks
    • Alumni
    • Asia-Pacific Programme for Senior Military Officers (APPSMO)
    • Asia-Pacific Programme for Senior National Security Officers (APPSNO)
    • SRP Executive Programme
    • Terrorism Analyst Training Course (TATC)
  • Publications
    • RSIS Publications
      • Annual Reviews
      • Books
      • Bulletins and Newsletters
      • Commentaries
      • Counter Terrorist Trends and Analyses
      • Commemorative / Event Reports
      • IDSS Paper
      • Interreligious Relations
      • Monographs
      • NTS Insight
      • Policy Reports
      • Working Papers
      • RSIS Publications for the Year
    • Glossary of Abbreviations
    • External Publications
      • Authored Books
      • Journal Articles
      • Edited Books
      • Chapters in Edited Books
      • Policy Reports
      • Working Papers
      • Op-Eds
      • External Publications for the Year
    • Policy-relevant Articles Given RSIS Award
  • Media
    • Great Powers
    • Sustainable Security
    • Other Resource Pages
    • Media Highlights
    • News Releases
    • Speeches
    • Vidcast Channel
    • Audio/Video Forums
  • Events
  • Giving
  • Contact Us
Facebook
Twitter
YouTube
RSISVideoCast RSISVideoCast rsis.sg
Linkedin
instagram instagram rsis.sg
RSS
  • Home
  • About RSIS
      • Introduction
      • Building the Foundations
      • Welcome Message
      • Board of Governors
      • Staff Profiles
        • Executive Deputy Chairman’s Office
        • Dean’s Office
        • Management
        • Distinguished Fellows
        • Faculty and Research
        • Associate Research Fellows, Senior Analysts and Research Analysts
        • Visiting Fellows
        • Adjunct Fellows
        • Administrative Staff
      • Honours and Awards for RSIS Staff and Students
      • RSIS Endowment Fund
      • Endowed Professorships
      • Career Opportunities
      • Getting to RSIS
  • Research
      • Research Centres
        • Centre for Multilateralism Studies (CMS)
        • Centre for Non-Traditional Security Studies (NTS Centre)
        • Centre of Excellence for National Security (CENS)
        • Institute of Defence and Strategic Studies (IDSS)
        • International Centre for Political Violence and Terrorism Research (ICPVTR)
      • Research Programmes
        • National Security Studies Programme (NSSP)
        • Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
      • [email protected] Newsletter
      • Other Research
        • Future Issues And Technology (FIT)
        • Science and Technology Studies Programme (STSP) (2017-2020)
  • Graduate Education
      • Graduate Programmes Office
      • Overview
      • MSc (Asian Studies)
      • MSc (International Political Economy)
      • MSc (International Relations)
      • MSc (Strategic Studies)
      • NTU-Warwick Double Masters Programme
      • PhD Programme
      • Exchange Partners and Programmes
      • How to Apply
      • Financial Assistance
      • Meet the Admissions Team: Information Sessions and other events
      • RSIS Alumni
  • Alumni & Networks
      • Alumni
      • Asia-Pacific Programme for Senior Military Officers (APPSMO)
      • Asia-Pacific Programme for Senior National Security Officers (APPSNO)
      • SRP Executive Programme
      • Terrorism Analyst Training Course (TATC)
  • Publications
      • RSIS Publications
        • Annual Reviews
        • Books
        • Bulletins and Newsletters
        • Commentaries
        • Counter Terrorist Trends and Analyses
        • Commemorative / Event Reports
        • IDSS Paper
        • Interreligious Relations
        • Monographs
        • NTS Insight
        • Policy Reports
        • Working Papers
        • RSIS Publications for the Year
      • Glossary of Abbreviations
      • External Publications
        • Authored Books
        • Journal Articles
        • Edited Books
        • Chapters in Edited Books
        • Policy Reports
        • Working Papers
        • Op-Eds
        • External Publications for the Year
      • Policy-relevant Articles Given RSIS Award
  • Media
      • Great Powers
      • Sustainable Security
      • Other Resource Pages
      • Media Highlights
      • News Releases
      • Speeches
      • Vidcast Channel
      • Audio/Video Forums
  • Events
  • Giving
  • Contact Us
  • instagram instagram rsis.sg
Connect

Getting to RSIS

Map

Address

Nanyang Technological University
Block S4, Level B3,
50 Nanyang Avenue,
Singapore 639798

View location on Google maps Click here for directions to RSIS

Get in Touch

    Connect with Us

      rsis.ntu
      rsis_ntu
      rsisntu
    RSISVideoCast RSISVideoCast rsisvideocast
      school/rsis-ntu
    instagram instagram rsis.sg
      RSS
    Subscribe to RSIS Publications
    Subscribe to RSIS Events

    RSIS Intranet

    S. Rajaratnam School of International Studies Think Tank and Graduate School Ponder The Improbable Since 1966
    Nanyang Technological University Nanyang Technological University

    Skip to content

     
    • RSIS
    • Publication
    • RSIS Publications
    • ASEAN’s Digital Economy: Development, Division, Disruption
    • Annual Reviews
    • Books
    • Bulletins and Newsletters
    • Commentaries
    • Counter Terrorist Trends and Analyses
    • Commemorative / Event Reports
    • IDSS Paper
    • Interreligious Relations
    • Monographs
    • NTS Insight
    • Policy Reports
    • Working Papers
    • RSIS Publications for the Year

    CO19046 | ASEAN’s Digital Economy: Development, Division, Disruption
    Amalina Anuar

    18 March 2019

    download pdf
    RSIS Commentary is a platform to provide timely and, where appropriate, policy-relevant commentary and analysis of topical and contemporary issues. The authors’ views are their own and do not represent the official position of the S. Rajaratnam School of International Studies (RSIS), NTU. These commentaries may be reproduced with prior permission from RSIS and due credit to the author(s) and RSIS. Please email to Editor RSIS Commentary at [email protected].

    SYNOPSIS

    What do US-China tensions in the technological sphere mean for ASEAN’s digital ambitions and how can it respond?

    COMMENTARY

    BOASTING AN increasingly wired and growing middle class, as well as a wealth of data stemming from a 642-million-strong population, ASEAN’s digital economy is ripe for the picking. By 2025, it will be worth an estimated US$240 billion.

    The prospects of market dominance and significant data pools to be mined for developing future technologies, combined with ASEAN’s geostrategic location, have lured greater major power interest into the region’s digital economy. Though global tech titans are more visible players in ASEAN’s digital space, greater government-to-government cooperation is emerging as economics and security become increasingly intertwined. What then might this mean for ASEAN?

    Development Opportunities

    Boosting financing for ASEAN’s infrastructure, digital or otherwise, could increase digital economy take-up. Competing infrastructure partnerships such as China’s Digital Silk Road (DSR) and the Washington-initiated Indo-Pacific Economic Vision (IPEV) could help service hard and soft infrastructure gaps across the region.

    Under the DSR, fibre-optic cables have boosted data-carrying speeds, improving telecommunications connectivity. In Malaysia, Alibaba’s Digital Free Trade Zone serves as a cross-border logistics and e-commerce centre, with another digital trade hub servicing Cambodia, Laos, Myanmar, Vietnam, and Thailand mooted for Thailand’s Eastern Economic Corridor.

    Generating soft infrastructure, Alibaba has promoted SME (small and medium-sized enterprise)-friendly trading initiatives via the Electronic World Trading Platform— a move that may heighten SMEs’ 10%-30% contribution to ASEAN’s exports.

    Benefits could further trickle in for ASEAN’s smart city initiatives. Aside from DSR initiatives, the November 2018 US-ASEAN Smart City partnership followed on the heels of the IPEV launch in July 2018, which allocated US$25 million to prime private sector investment in regional digital connectivity and cybersecurity.

    Where Washington’s commitment has lagged, moreover, other Quad members – Japan, Australia, India − have stepped up to fill the gap. Besides the smart city partnerships slated for 2019, Japan will train 80,000 ASEAN high-tech specialists. Meanwhile, Tokyo’s upcoming G20 Global Data Governance Agenda, along with 2018’s ASEAN-Australia Digital Trade Standards Initiative, could aid in hammering out multilateral regulatory infrastructure for ASEAN’s internet economy.

    Divisive Risks

    Yet intense major power rivalry to build and control the infrastructure of the future, specifically 5G networks and their concomitant technologies, could risk a divided ASEAN digital economy.

    So far, ASEAN’s response to US pressure to ban Chinese-built 5G networks has been mixed, with the Philippines greenlighting its Huawei-serviced 5G networks, while Thailand and Malaysia have approved Huawei’s 5G trials. Though President Trump recently struck a more conciliatory tone on Huawei, calling for greater competition rather than ‘blocking out currently more advanced technologies’, pressure to aid continued US technological market hegemony may not abate given underlying geopolitical tensions.

    A lack of 5G market competition could result in costlier technology and stymied innovation. Delays in rolling out 5G networks may be more detrimental, as 5G is instrumental for harnessing Industrial Revolution 4.0. In countries where 3G is still relatively prominent, ASEAN members could leapfrog to higher levels of economic development by transitioning to 5G — though expectations should be tempered as 5G’s transformative impact may not be felt in the short-term until applications such as smart factories become more ubiquitous.

    Another concern is the interoperability of Chinese versus non-Chinese 5G technology. While both types of networks must interact in the future regardless, cross-network transaction and operation costs could rise without seamless connectivity. While global standard setting bodies can craft multilateral frameworks, the tussle over technological rulemaking could stymie progress and adoption.

    Hardware aside, competing digital standards split between US-supported liberal versus protectionist rules could undermine the competitiveness of ASEAN’s digital economy, if businesses must tailor operations to disparate regulatory regimes.

    Exacerbated socioeconomic divides pose another a risk. Smaller local enterprises may struggle to compete against the various foreign tech titans advancing into ASEAN’s digital sphere, who are bolstered by greater investment capabilities, digital-savvy talent pools, and access to data.

    Unpredictable Disruptions & ASEAN’s Response

    As technology becomes more integrated into supply chains, security concerns and greater politicisation of market operations via policy-driven economic decoupling will likely continue to disrupt the business landscape. However, the extent of disruption remains unclear.

    As businesses adjust, trends to localise or re-shore supply chains in the hopes of avoiding non-tariff security measures may pick up speed. Though ASEAN could benefit from these supply chain redistributions, it could also herald a period of greater business uncertainty and hence, lower economic growth.

    Soft infrastructure such as competition policy should be updated for inclusive growth in the digital age. Developing an ASEAN framework to ensure infrastructure projects align with ASEAN interests and economic development visions, as voiced in the Master Plan for ASEAN Connectivity and ASEAN Economic Community goals respectively, would not be remiss.

    This could cover monitoring the impact of digital trade and infrastructure projects on SMEs for a people-centric ASEAN with an eye towards including micro-enterprises, dovetailing with Thailand’s goals of Digitising Micro-enterprises as 2019’s ASEAN Chair. Enhanced logistics and market access alone are insufficient for growth without addressing traditional, offline pain points such as lacking SME export strategies and trade financing.

    Way Forward

    With cybersecurity underpinning the trustworthiness of ASEAN’s digital economy, enhancing ASEAN’s capabilities on this front will become even more critical, especially if the region’s supply chains are to withstand stricter security probes.

    Going forward, cybersecurity could be an added consideration under the Thai Chair’s prioritised Digital Integration Framework Action Plan (DIFAP). This could include devising regional security standards applicable to multi-vendor 5G network providers, as excluding Chinese technology from ASEAN’s nascent digital space is not viable in the larger context of the region’s economic interdependence and the potential repercussions of jettisoning neutrality.

    Lastly, increasing ASEAN’s appeal as a single market— including by implementing DIFAP— would reduce the risks of a divided digital economy and strengthen its credibility as a production base of choice for businesses, better preparing the region for both the best and worst of times in the digital era.

    About the Author

    Amalina Anuar is a Research Analyst with the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

    Categories: Commentaries / Country and Region Studies / Non-Traditional Security / East Asia and Asia Pacific / Global / South Asia / Southeast Asia and ASEAN

    Last updated on 18/03/2019

    comments powered by Disqus
    RSIS Commentary is a platform to provide timely and, where appropriate, policy-relevant commentary and analysis of topical and contemporary issues. The authors’ views are their own and do not represent the official position of the S. Rajaratnam School of International Studies (RSIS), NTU. These commentaries may be reproduced with prior permission from RSIS and due credit to the author(s) and RSIS. Please email to Editor RSIS Commentary at [email protected].

    SYNOPSIS

    What do US-China tensions in the technological sphere mean for ASEAN’s digital ambitions and how can it respond?

    COMMENTARY

    BOASTING AN increasingly wired and growing middle class, as well as a wealth of data stemming from a 642-million-strong population, ASEAN’s digital economy is ripe for the picking. By 2025, it will be worth an estimated US$240 billion.

    The prospects of market dominance and significant data pools to be mined for developing future technologies, combined with ASEAN’s geostrategic location, have lured greater major power interest into the region’s digital economy. Though global tech titans are more visible players in ASEAN’s digital space, greater government-to-government cooperation is emerging as economics and security become increasingly intertwined. What then might this mean for ASEAN?

    Development Opportunities

    Boosting financing for ASEAN’s infrastructure, digital or otherwise, could increase digital economy take-up. Competing infrastructure partnerships such as China’s Digital Silk Road (DSR) and the Washington-initiated Indo-Pacific Economic Vision (IPEV) could help service hard and soft infrastructure gaps across the region.

    Under the DSR, fibre-optic cables have boosted data-carrying speeds, improving telecommunications connectivity. In Malaysia, Alibaba’s Digital Free Trade Zone serves as a cross-border logistics and e-commerce centre, with another digital trade hub servicing Cambodia, Laos, Myanmar, Vietnam, and Thailand mooted for Thailand’s Eastern Economic Corridor.

    Generating soft infrastructure, Alibaba has promoted SME (small and medium-sized enterprise)-friendly trading initiatives via the Electronic World Trading Platform— a move that may heighten SMEs’ 10%-30% contribution to ASEAN’s exports.

    Benefits could further trickle in for ASEAN’s smart city initiatives. Aside from DSR initiatives, the November 2018 US-ASEAN Smart City partnership followed on the heels of the IPEV launch in July 2018, which allocated US$25 million to prime private sector investment in regional digital connectivity and cybersecurity.

    Where Washington’s commitment has lagged, moreover, other Quad members – Japan, Australia, India − have stepped up to fill the gap. Besides the smart city partnerships slated for 2019, Japan will train 80,000 ASEAN high-tech specialists. Meanwhile, Tokyo’s upcoming G20 Global Data Governance Agenda, along with 2018’s ASEAN-Australia Digital Trade Standards Initiative, could aid in hammering out multilateral regulatory infrastructure for ASEAN’s internet economy.

    Divisive Risks

    Yet intense major power rivalry to build and control the infrastructure of the future, specifically 5G networks and their concomitant technologies, could risk a divided ASEAN digital economy.

    So far, ASEAN’s response to US pressure to ban Chinese-built 5G networks has been mixed, with the Philippines greenlighting its Huawei-serviced 5G networks, while Thailand and Malaysia have approved Huawei’s 5G trials. Though President Trump recently struck a more conciliatory tone on Huawei, calling for greater competition rather than ‘blocking out currently more advanced technologies’, pressure to aid continued US technological market hegemony may not abate given underlying geopolitical tensions.

    A lack of 5G market competition could result in costlier technology and stymied innovation. Delays in rolling out 5G networks may be more detrimental, as 5G is instrumental for harnessing Industrial Revolution 4.0. In countries where 3G is still relatively prominent, ASEAN members could leapfrog to higher levels of economic development by transitioning to 5G — though expectations should be tempered as 5G’s transformative impact may not be felt in the short-term until applications such as smart factories become more ubiquitous.

    Another concern is the interoperability of Chinese versus non-Chinese 5G technology. While both types of networks must interact in the future regardless, cross-network transaction and operation costs could rise without seamless connectivity. While global standard setting bodies can craft multilateral frameworks, the tussle over technological rulemaking could stymie progress and adoption.

    Hardware aside, competing digital standards split between US-supported liberal versus protectionist rules could undermine the competitiveness of ASEAN’s digital economy, if businesses must tailor operations to disparate regulatory regimes.

    Exacerbated socioeconomic divides pose another a risk. Smaller local enterprises may struggle to compete against the various foreign tech titans advancing into ASEAN’s digital sphere, who are bolstered by greater investment capabilities, digital-savvy talent pools, and access to data.

    Unpredictable Disruptions & ASEAN’s Response

    As technology becomes more integrated into supply chains, security concerns and greater politicisation of market operations via policy-driven economic decoupling will likely continue to disrupt the business landscape. However, the extent of disruption remains unclear.

    As businesses adjust, trends to localise or re-shore supply chains in the hopes of avoiding non-tariff security measures may pick up speed. Though ASEAN could benefit from these supply chain redistributions, it could also herald a period of greater business uncertainty and hence, lower economic growth.

    Soft infrastructure such as competition policy should be updated for inclusive growth in the digital age. Developing an ASEAN framework to ensure infrastructure projects align with ASEAN interests and economic development visions, as voiced in the Master Plan for ASEAN Connectivity and ASEAN Economic Community goals respectively, would not be remiss.

    This could cover monitoring the impact of digital trade and infrastructure projects on SMEs for a people-centric ASEAN with an eye towards including micro-enterprises, dovetailing with Thailand’s goals of Digitising Micro-enterprises as 2019’s ASEAN Chair. Enhanced logistics and market access alone are insufficient for growth without addressing traditional, offline pain points such as lacking SME export strategies and trade financing.

    Way Forward

    With cybersecurity underpinning the trustworthiness of ASEAN’s digital economy, enhancing ASEAN’s capabilities on this front will become even more critical, especially if the region’s supply chains are to withstand stricter security probes.

    Going forward, cybersecurity could be an added consideration under the Thai Chair’s prioritised Digital Integration Framework Action Plan (DIFAP). This could include devising regional security standards applicable to multi-vendor 5G network providers, as excluding Chinese technology from ASEAN’s nascent digital space is not viable in the larger context of the region’s economic interdependence and the potential repercussions of jettisoning neutrality.

    Lastly, increasing ASEAN’s appeal as a single market— including by implementing DIFAP— would reduce the risks of a divided digital economy and strengthen its credibility as a production base of choice for businesses, better preparing the region for both the best and worst of times in the digital era.

    About the Author

    Amalina Anuar is a Research Analyst with the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

    Categories: Commentaries / Country and Region Studies / Non-Traditional Security

    Last updated on 18/03/2019

    Back to top

    Terms of Use | Privacy Statement
    Copyright © S. Rajaratnam School of International Studies. All rights reserved.
    This site uses cookies to offer you a better browsing experience. By continuing, you are agreeing to the use of cookies on your device as described in our privacy policy. Learn more
    OK
    Latest Book
    ASEAN’s Digital Economy: Development, Division, Disruption

    SYNOPSIS

    What do US-China tensions in the technological sphere mean for ASEAN’s digital ambitions and how can it respond?

    COMMENTARY

    BOASTIN ...
    more info