Hanoi, 13 November 2020: The COVID-19 pandemic has disrupted the movement of goods and services within the supply chains of the ASEAN Member States (AMS). ERIA’s President, Prof Hidetoshi Nishimura, stated in his remarks delivered at the ASEAN Business and Investment Summit (ABIS) 2020 that to address these challenges, AMS need to foster greater digital connectivity in the region. Recovering ASEAN’s supply chains is critical for the recovery of the region because of its strong international production linkages under the framework of a single market and production base.  Digital connectivity is key to this recovery.

‘Investment in digital infrastructure and addressing the digital divide in ASEAN will be necessary to ensure equitable distribution of dividend from digitalisation. Capturing this opportunity requires actions beyond building internet infrastructure. with adequate investment in upgrading the education system, and upskilling and reskilling of the workforce,’ said Prof Nishimura during the Panel Discussion on ASEAN’s Economic Outlook.

Moreover, Prof Nishimura stated that the crisis has also brought new opportunities for ASEAN to attract investments from businesses, especially in labour-intensive manufacturing, looking to diversify their supply chains from current locations (especially China).

‘This would require AMS to continue domestic reform and deepen integration by removing existing barriers for seamless flow of goods,’ he said, adding that he would also like to take this opportunity ‘to congratulate ASEAN for implementing new trade facilitation measures this year, including the live operation of ASEAN Single Window for electronic exchange of the ATIGA certificate of origin Form D, ASEAN Customs Transit System (ACTS) and the ASEAN-wide Self Certification System (ASWSC).’

According to Prof Nishimura, ASEAN could potentially accelerate economic growth by increasing investments on green infrastructure such as renewable and energy efficiency technologies and addressing basic infrastructure gaps in some AMS.

The panel discussion also featured Secretary-General of OECD, Mr Angel Gurría; Deputy Secretary-General of ASEAN for ASEAN Economic Community, Dr Aladdin Rillo; Regional Director of East Asia and Pacific for the Equitable Growth, Finance, and Institutions Vice-Presidency of the World Bank, Mr Hassan Zaman; Chairman of the PricewaterhouseCoopers International Limited, Mr Robert E. Moritz; and Chairwoman of the BRG Group, ASEAN BAC Viet Nam, Ms Nguyen Thi Nga. Ms Lin Xueling, Executive Producer at Channel News Asia, moderated the discussion.

In the Q&A session, Prof Nishimura reiterated the importance of productivity growth of MSMEs, which form the backbone of ASEAN economies, through the adoption of new technologies to improve productivity and stay competitive. Furthermore, he stated that even though information and communication technology (ICT) is important, its concentration can also displace people.

‘These different forces could be merged and create a new type of order of servicification of industry and this needs humans. Not displace humans. Technology must be human-centric. If you introduce advanced technology, we need human. Human is inevitably important,’ he said in closing.

ERIA has conducted a series of MSMEs Talk under the theme ‘ASEAN MSMES in a COVID-19 World’, consisted of 10 webinars covering various sides of the topic. The event report can be found here, with a short video to summarise the first five talks here. The summary and recording of individual events can be found here.