Digital Transformation and Economic Recovery in ASEAN Take the Spotlight at 10th Editors Roundtable
Jakarta, 8 October 2021: Now in the second year of the COVID-19 health crisis, ASEAN Member-States (AMS) have made remarkable progress in digitalisation and economic recovery. However, the region must also counter problems encompassing the digital divide, rising unemployment, and a widening inequality gap. Southeast Asia continues to rely on regional cooperation amidst the ever-changing pandemic landscape while having to quickly adjust national strategies to maintain its economic competitiveness.
Hosted by the Economic Research Institute for ASEAN and East Asia (ERIA) with media partner The Scoop (Brunei), the 10th ERIA Editors Roundtable (ERT) gathered editors, journalists, and other experts to address the multitude of challenges facing Southeast Asia in a post-pandemic world. President of ERIA, Prof Hidetoshi Nishimura, offered his remarks for the event that was held virtually for a second consecutive year. He highlighted the ERT’s decade-long milestone this year and thanked the experts and journalists who have continuously supported the event over the years. His speech additionally covered the importance of regional integration for ASEAN stating that ‘ASEAN must remain united to ensure ASEAN Centrality and to catch up with the digitalised world.’
Founding Editor of The Scoop, Ms Ain Bandial offered her remarks as a co-host of this year’s event. She spoke of the dangerous implications of rampant misinformation during the pandemic and stated how the current reality ‘has invigorated journalism to separate fact from fiction.’
The first panel titled ‘ASEAN COVID-19: The Road to Recovery’ was moderated by Mr Kavi Congkittavorn, Senior Communication Advisor, ERIA. Panellists included:
- Dr Dionisius A Narjoko, Senior Economist, ERIA
- Dr Jayant Menon, Visiting Senior Fellow, ISEAS, Singapore
- Dr Kirida Bhaopichitr, Research Director of Thailand Development Research Institution Foundation (TDRI), Thailand
After Mr Chongkittavorn opened the session, Dr Menon spoke about redefining the pandemic, reopening borders, and continuing with regional economic recovery. With a better understanding of the virus and having over two years to adapt, Dr Menon believes that new virus variants will not derail the economic recovery. Although uncertainties remain, Dr Menon suggested that governments consider reopening borders given that complete border shutdowns have not stopped the significant rise of COVID-19 infections as seen in Singapore and Australia. Opening borders would counter rising protectionism and nationalism as well as reinstating the movement of workers which has significantly impacted global value chain operations. As such, regional and multilateral trade agreements like the Regional Comprehensive Economic Partnership (RCEP) ‘must play a bigger role going forward.’
Dr Narjoko credits the extraordinary investments by multinational corporations in Southeast and East Asia, since the 1980s, for helping the region’s value chain to quickly recover during COVID-19. The severity and duration of the pandemic have, nonetheless, added immense pressure on companies to strive for efficiency as limitations on the movement of professionals led to higher logistics costs for industries. Dr Narjoko offered three recommendations to ease the burden, namely: (1) Aim for faster digital adoption; (2) Streamline the supply process by upgrading technologies; (3) Enhance human capital and skills transformation to cope with more high-tech machines. The implementation of the RCEP will be especially crucial to facilitate a post-pandemic recovery as it is intended to make trade faster and cheaper hence supporting higher growth of value chains.
Dr Bhaopichitr shared her assessment on the macroeconomic and non-macroeconomic trends set to impact ASEAN, adding that ‘the world is recovering, but recovery is divergent where developed countries are growing much faster during this period.’ AMS can expect the US to raise its interest rates and see a stronger US Dollar which will have serious effects on public sector debts. ASEAN can also expect more relocations of factories to the region as the US – China trade and tech wars heat up. On future opportunities, Dr Bhaopichitr finds that digitalisation will remain a mainstay in ASEAN’s economic growth story and that the region ought to take advantage of the abundance of its raw materials to deepen decarbonisation efforts.
The QnA session concentrated on maximising digitalisation potential in which all three panellists underscored the issue of labour market disruptions in key sectors like property and finance. Southeast Asia must also remain agile in responding to the negative implications of wider digital adoption.
The second panel titled ‘Are We Ready for the New Dynamics’ was moderated by Ms Gwen Robinson, Editor at Large, Nikkei Asian Review. Panellists included:
- Dr Aladdin D Rillo, Senior Economic Advisor, ERIA
- Mr Yasu Ota, Columnist, Nikkei
- Ms Ima Abdulrahim, Director of Public Policy Southeast Asia, Facebook
Ms Robinson opened the panel by highlighting the myriad issues ASEAN must address to ensure that ASEAN is prepared for the ‘new dynamics’ ranging from a falling labour force participation, value chain slowdowns, and growing inequalities. Coupled with significant forces like climate change, digitalisation, and a green economy, she asked panellists to explore whether the region is prepared to overcome the multitude of new dynamics headed its way.
Dr Rillo stated that ASEAN has been working towards effectively tackling the new issues since before COVID-19 hence he believes that the region is ready to resolve these matters. Aspects that Member-States can improve on include reducing the digital divide, investing in digital infrastructure, and working collectively to address sustainability challenges. ‘When we talk about the ASEAN Economic Community post-2025, I am hoping for a more digitally-driven and green market integration for ASEAN,’ he stated.
Mr Ota discussed how COVID-19-related disruptions to Southeast Asia’s value chain has led some Japanese companies to bring back production to Japan and led to supply problems in Europe and the US. Geopolitical tensions between the US and China can be advantageous for AMS as firms are rethinking supply chain strategies which Mr Ota believes will be the new normal. To maximise this momentum, Mr Ota suggests that the region’s policymakers increase Southeast Asia’s attractiveness as well as determine policies that would appeal to investors.
Ms Abdulrahim provided a private sector perspective on digital transformation trends, explaining that while ASEAN has made immense strides in connectivity, nearly half of the region’s population remains unconnected to the internet. Most often, this connectivity gap affects those earning low incomes and lacking the skills and awareness to utilise digital services. As one of the Big Tech companies, Ms Abdulrahim expressed Facebook’s readiness to support ASEAN’s recovery and called on Southeast Asian governments to implement ‘a conducive regulatory and policy environment to support investments and partnerships with us.’
The last session featured a Special Dialogue with Secretary-General HE Dato Paduka Lim Jock Hoi together with Prof Nishimura who posed the questions.
Q: What are the major challenges for ASEAN to recover quickly from the COVID-19 damage?
A: We need to be mindful that uneven recovery in various sectors and societies if left unaddressed, may result in growing inequality in terms of income and access to digital technology for Southeast Asia. The focus of our intervention should be on segments of society that are most vulnerable to the pandemic such as women, youth, medium and small enterprises, and tourism players. Regionally, we have finalised The Post-COVID-19 Recovery Plan for ASEAN Tourism and expedited the implementation of the ASEAN Travel Corridor Arrangement Framework. We need to speed up the recovery process in travel and tourism which contribute nearly US$380 billion to the economies of AMS.
Q: What are the next steps pertaining to the ASEAN Single Window (ASW) integration in the context of digital ASEAN?
The ASW is already in operation, and we are the only region that has this arrangement. With three document exchanges in 2022, ASEAN will be in the position as one of the most advanced regions transforming paperless trading. This would add more confidence in the region as we aim to double our intra-trading activities in terms of volume. ASEAN is working to expand the ASW to ASEAN +1 free trade agreements (FTA) and with dialogue partners. Hopefully, this will enhance the utilisation of our +1 FTA and other FTAs.
Q: What are the next steps for ASEAN regarding the implementation of the RCEP?
A: We must first dispel that the RCEP is China-led because, from the start, it has always been ASEAN-led. We must make sure that the implementation can be achieved this year and entered into force in January 2022, and by the look of it, ASEAN will achieve this. We’re working closely with AMS and non-ASEAN RCEP countries to expedite their respective domestic procedures. China has ratified it and Japan is on board, and hopefully so will New Zealand. We are also conducting outreach on the technical requirements of the RCEP agreement in which the ASEAN Secretariat will work in-depth with the East Asia Business Council. We are working closely to start our RCEP Secretariat which will be the main engine of this agreement.
Q: When can the ASEAN Outlook on the Indo-Pacific (AOIP) be operationalised in the context of the broader geopolitical situation?
A: We have increased our utility of the AOIP as a framework for cooperation between ASEAN and its partners. I think ASEAN can pursue a discussion on how to mainstream or operationalise these key priority areas. Another aspect is connectivity which is integral to securing regional peace and security. With initiatives such as the Master Plan on ASEAN Connectivity, we need to assess whether there is synergy or convergence to enhance connectivity. The other element of AOIP is sustainable development which we can work closely with the UN on the sustainable development agenda. There are so many economic activities in the Indo-Pacific and I think we can work out and agree among ourselves to develop areas of cooperation and this can be done to other ASEAN-led mechanisms like ASEAN + 1.
Q: What role can ASEAN play to maintain stability in the region during the US – China competition?
A: We want to see this region maintain peace and stability. Both the US and China are ASEAN’s major trading partners and we recognise that they contribute substantively to the region’s economic growth and development. We want to see peaceful, good relations between the US and China.
ASEAN provides a platform for dialogue between countries like the US and China. ASEAN-led mechanisms like the ASEAN Regional Forum and East Asia Summit provide the US and China platforms for interactions. The US and China continue to support ASEAN centrality and for ASEAN to continue being a driving force in the region. We hope that the manifestation of such support will be pursued substantively and enhanced in the future.
Q: What are the next steps to the agreed ‘Five-Point Consensus’?
A: There is an ASEAN special envoy who can assist with the work to bridge the gap that is happening in Myanmar. We want to see Myanmar be stable as they are part of ASEAN, and an unstable Myanmar will have implications on ASEAN as well. We must not politicise ASEAN’s humanitarian system in Myanmar to ensure that support effectively reaches communities in need and is expedited without impediments.
A peaceful resolution in Myanmar rests on its people. We can help them, and it will not happen overnight. ASEAN stands ready to assist Myanmar on the path to such solutions through facilitating constructive dialogues, and we will continue to provide humanitarian assistance.
Mr Koji Hachiyama, COO of ERIA, closed the ERT by thanking all the participants, in particular, editors and journalists who are at the frontline of information sharing. ‘You are the best informers of our common efforts to fight back against the pandemic,’ he stated. He further expressed hopes that next year we could meet in Cambodia in person.