ASEAN’s Digital Economy Pact to be Game Changer, Indonesia Says
Jakarta. Chief Economic Affairs Minister Airlangga Hartarto has said that the digital economy pact that ASEAN had just begun negotiating would become a game changer to the Southeast Asian bloc.
ASEAN over the weekend officially launched the negotiations to the Digital Economy Framework Agreement (DEFA). The regional grouping has set a goal to complete the negotiations by 2025. According to Airlangga, the DEFA addresses new technologies that past ASEAN agreements did not house.
“Such as the transformation of artificial intelligence [AI], blockchains, and changes in technologies over the next 2-3 years. The DEFA will become a game changer for ASEAN,” Airlangga said at the ASEAN Business & Investment Summit (ABIS) in Jakarta on Sunday evening.
ASEAN’s digital economy is expected to reach $1 trillion by 2030 under a business-as-usual scenario. Having a DEFA in place is set to double the numbers to $2 trillion by that year. And Indonesia's digital economy can rise up to $800 billion with DEFA, according to Airlangga.
In 2021, ASEAN endorsed the Bandar Seri Begawan Roadmap (BSSR) which called for the commencement of the DEFA negotiations by 2025. This meant that ASEAN began the negotiations much earlier than originally planned.
Airlangga reported that ASEAN’s economy grew between 4 and 5 percent on an annual basis over the past decade. The minister added ASEAN became the fifth-largest economy, and also ranked fourth in terms of exports. ASEAN was the second-largest recipient of foreign direct investment (FDI) last year.
ASEAN posted a 5.7 percent growth in 2022. Airlangga attributed the growth to domestic consumption, trade, and investment. The digital economy was also among the sectors that witnessed an increase in investment last year. Foreign direct investment (FDI) inflows to the region grew 5.5 percent.