AEC Blueprint 2025 Analysis: Paper 18 | An Analysis of the ASEAN Cooperation in Information and Communications Technology (ICT)
The importance of ICT in supporting the AEC cannot be overemphasised. Practically advancement in the ICT sector contributes significantly progress of the other sectors. The biggest challenge that ASEAN is facing is in the large gap among member states especially in terms of ICT infrastructure, readiness and human capital to support ICT development and cooperation, improve connectivity and enhance ASEAN’s competitiveness. It is imperative that the authorities in charge of ICT expedite the efforts to achieve level playing field across the region to ensure that the targets can be accomplished. In doing so, they must involve the relevant stakeholders who have the resources to contribute to the initiative, especially since PPP is already part of the agenda. Without reducing the gaps, the vision of a connected ASEAN will not be realised.
The following report is part of a series which attempts to provide a detailed analysis on the ASEAN Economic Community (AEC) Blueprint 2025. Each report will cover a single element of the blueprint, providing a comprehensive look at past achievements, present problems, and the future plans of the AEC. Special attention will be placed upon the strategic measures outlined in the AEC Blueprint 2025. This report aims to provide insight into the viability surrounding regional economic integration under the AEC.
ASEAN ICT Cooperation
In enhancing connectivity in ASEAN, ICT plays a super important role. ICT has revolutionized the way people live, interact with others, and do business. There isn’t a single aspect of our lives that has not been transformed by progress in ICT. As emerging markets, ASEAN is still in the early stages of developing ICT and applying it in businesses. Some member states are of course more advanced than the others in developing and utilizing ICT, but ASEAN needs to collectively continue to work on improving connectivity within the region and with the rest of the world because the way future business is conducted will very much depend on ICT. ASEAN has recognized this need and has established connectivity (and sectoral cooperation) as a new separate pillar of the AEC to support economic development and integration, and improve cross cooperation among the sectors under the AEC.
This report has been prepared to provide some analysis on the importance of ICT in making its significant contribution to connectivity and how it will change the way business is conducted in the next ten years of AEC implementation.
A. Targets under the AEC 2015 Blueprint
ASEAN ICT cooperation under the AEC Blueprint 2015, perhaps because when it was drafted, ASEAN was still in its early stages in terms of ICT development. Nonetheless, member states already understood the importance and that future economic and business activities would be very much driven by advances in ICT technology. In that blueprint, ICT cooperation is classified under infrastructure development of the second pillar of AEC 2015: competitive economic region. ASEAN recognized that a secure and connected information infrastructure is important to promote economic growth and improve competitiveness, building on the existing national capabilities and transforming them into a regional infrastructure.
The focus on development of information infrastructure was aimed at building high-speed inter-connections among all National Information Infrastructures (NII). The strategic actions identified in the blueprint include:
- Facilitate high-speed connection among all NIIs by 2010 and implement ICT measures identified in Vientiane Action Plan (VAP)
- Intensify capacity building and training programmes for national Computer Emergency Response Teams (CERTs) and strengthen their capacity, cooperation and coverage of ASEAN’s cyber security network
- Encourage the participation of all stakeholders in utilization and development of ICT applications and services on the regional information infrastructure
- Support sectoral ICT applications to improve their effectiveness and productivity
- Expand the number of ASEAN countries participating in the ASEAN Mutual Recognition Arrangement (MRA) for telecommunications equipment
- Deepen regional policy and regulatory framework to deal with the opportunities and challenges in the area of Next Generation Networks
Also under the second pillar of the AEC is ASEAN’s plan to collaborate in promoting e-commerce in the region with the objective of outlining the policy and legal infrastructure for e-commerce and enabling online trade in goods with ASEAN through the implementation of the e-ASEAN Framework Agreement and based on common reference frameworks. The strategic actions for ASEAN e-commerce include:
- Adopt best practices in implementing telecommunications competition policies and fostering the preparation of domestic legislation on e-commerce
- Harmonise the legal infrastructure for electronic contracting and dispute resolution
- Develop and implement better practice guidelines for electronic contracting, guiding principles for online dispute resolution services, and mutual recognition framework for digital signatures in ASEAN
- Facilitate mutual recognition of digital signatures in ASEAN
- Study and encourage the adoption of the best practices and guidelines of regulations and/or standards based on a common framework
- Establish a networking forum between the businesses in ASEAN and its dialogue partners as a platform for promoting trade and investment
After a few years of implementation, the ASEAN Telecommunications and IT Ministers (TELMIN) felt that, given the importance of ICT in driving the social and economic transformation in the region, a more focused and integrated roadmap may be necessary to better coordinate and expedite the implementation of the measures in the AEC Blueprint 2015. Therefore, in 2011 the ASEAN TELMIN endorsed the ASEAN ICT Masterplan 2015 (AIM 2015) with the aim of better steering the development of ICT in the ASEAN region, particularly during the last five years of the AEC 2008-2015.
Under the AIM 2015, there are six strategic thrusts that would guide the activities and initiatives to achieve the expected outcomes. Those strategic thrusts include:
- Economic transformation through creation of a conducive business environment to attract and promote trade, investment and entrepreneurship in the ICT sector
- People empowerment and engagement by enhancing the quality of life through affordable and equitable ICT
- Innovation by fostering a creative, innovative and green ICT sector
- Infrastructure development through development of ICT infrastructure to support the provision of services to all ASEAN communities
- Human capital development by developing competent and skilled human capital in the ICT to support the growth of the ICT sector and help transform other sectors of the economy
- Bridging the digital divide by addressing the varying levels of ICT development and adoption within individual countries and across the region, as well as focusing on bridging other gaps within the digital divide to promote greater adoption of ICT
These six thrusts were expected to bring about four outcomes:
B. Significant Achievements To Date
- Given that the AIM 2015 was the main guidance for the implementation of ASEAN ICT development prior to 2015, evaluation of the progress below refers to the six strategic thrusts in the masterplan1. Progress in the ICT sector is mostly achieved through completion of projects relevant to each thrust.
C. Current Issues and Challenges
Without question, advancement in ICT is crucial for ASEAN economies to move forward and be more competitive in the future. Establishing connectivity, under which ICT is an important component, proves that ASEAN is seriously working towards integrating the economies to support the realization of single market and production base. Completion of AEC Blueprint 2015 has resulted in significant progress, but many challenges and issues remain and new ones have come. As in other sectors, the difference in level of economic development across the ASEAN region is a significant challenge to overcome as the gaps make it difficult for member states to engage with each other on the same protocol and standard.
In some member states, ICT penetration is very high, while in others the rate is very low. This may be attributed to the difference in ICT infrastructure across the region and the affordability of ICT products and services. The challenge is for the authorities to address these two issues to ensure level playing field.
Differences across the ASEAN region are also seen in the quantity of ICT professionals that is required to develop the sector in each member state. In addition, there needs to be a uniform definition of ICT professional so that member states can better work towards establishing MRAs and supporting cross-border movement of ICT workers.
In the area of e-commerce, in ASEAN it is still underdeveloped, accounting for only 1% of total retail sales, compared to 6-8% in China and advanced economies2. There is still very large room for improvement, especially considering that the middle class with higher purchasing power will increase.
D. Plans under the AEC 2025 Blueprint
Connectivity is now a new, separate pillar of the AEC because of its importance in integrating the ASEAN economies and connecting ASEAN with the global economy. The new blueprint states that ICT will drive ASEAN’s economic and social transformation and therefore strong ICT infrastructure is necessary to facilitate the development of business environment that is conducive to enhancing and promoting trade, investment and entrepreneurship. The aim is to narrow and eliminate the gap in ICT development (known as digital divide) and to ensure that everyone will benefit from the using ICT in their activities.
Plans for ICT development in ASEAN 2025 is based on the achievements made under the past ASEAN ICT Master Plan to bring ASEAN to a higher level in terms of establishing a digitally-empowered AEC that is secure, sustainable and transformative, and of enabling an innovative, inclusive and integrated AEC as well. The strategic measures involved include:
- Economic transformation by exploring further utilization and coordination of ICT for economic development, and promoting digital trade in the region;
- People integration and empowerment through ICT by strengthening digital inclusion initiatives, and exploring new ways to enhance internet broadband coverage and affordability;
- Innovation through support to ICT innovations and entrepreneurship as well as new technological developments;
- ICT infrastructure development through improvement of ICT infrastructure and connectivity particularly in the rural areas, and development of measures to enhance the resilience of ICT infrastructure;
- Human capital development by strengthening the professional development of ICT workforce in ASEAN;
- ICT in the single market through promotion of freer flow of ICT products, services and investment in the region as well as lowering of international mobile roaming charges;
- New media and content industry by encouraging growth and use of e-services and new media in ASEAN;
- Information security and assurance by building a trusted digital ecosystem as well as further strengthening cooperation in cyber security and developing measures to protect personal data.
In addition to the AEC Blueprint 2025, direction of the development of ICT sector in ASEAN is also guided by the Master Plan on ASEAN Connectivity (MPAC) 2025. The MPAC provides a grand guidance on improving and promoting ASEAN Connectivity in five key areas:
In relation to ICT cooperation in ASEAN, perhaps area (ii) is most relevant. The initiatives under digital innovation include:
- Enhance the MSME technology platform
- Develop the ASEAN digital financial inclusion framework
- Establish an ASEAN open data network
- Establish an ASEAN digital data governance network
E. AEC 2025 Blueprint Analysis
- ASEAN has long recognized the importance of ICT in supporting the development and integration of the economies in the region. The new AEC blueprint continues to strengthen ASEAN’s cooperation in promoting development and utilization of ICT in integrating the ASEAN economies. Some analyses on the progress on each area in the blueprint are as follows:
F. Conclusion: Moving Forward with the AEC 2025 Plans
The ASEAN ICT authorities need to address the issues of large gaps in ICT developments in ASEAN. These include gaps in infrastructure development, which leads to discrepancies in broadband speed, utilization of ICT products and services, and prices of ICT services. Improved infrastructure would also allow for greater support from the ICT sector to the other economic sectors such as MSME development, logistics and financial inclusion, as well as enhancing security and trust in cyber transactions.
More efforts need to be allotted to the education side to increase the quantity of ICT professionals that could support not just the utilization of ICT, but also improve R&D, innovation and technology transfer. The ASEAN ICT Scholarship scheme needs to be expedited in its implementation.
E-commerce needs to be promoted to allow greater movement of goods and services by improving the broadband access, involvement of local participants, security and payment, and the logistics side of e-commerce. E-commerce will play an important role in ASEAN single market.
Similar to transport, infrastructure financing could be an issue in ICT development. ASEAN has established the ASEAN Infrastructure Fund (AIF) that has made some important contributions to infrastructure projects in the region. While the current size of the AIF is still quite small, enlargement of the Fund to meet with the growing demand for infrastructure financing could be met by stronger communication and cooperation with the finance authorities in the region.
PPP has been mentioned in the AEC Blueprint and MPAC 2025 as a way to promote ICT development. It is then very important for the ASEAN ICT authorities to engage the private sector more intensively in this initiative3. Stronger collaboration will result in more realistic outcomes in support of the AEC and its stakeholders.
1 Most inputs for this section are taken from ASEAN ICT Masterplan 2015 Completion Report
2 Lifting the Barriers to e-Commerce in ASEAN, CARI and A.T. Kearney
3 The importance of this has been confirmed by ASEAN IT Priorities 2016, a report by Computer Weekly. According to the study, ASEAN CIOs are expected to spend more on IT in 2016 and the following years since ASEAN consumers are expected to be more computer and technology savvy in spending their money.
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CARI and AT Kearney, Lifting the Barriers to e-Commerce in ASEAN
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