Asean should pursue digital economy, green economy as part of recovery: DPM Heng

ASEAN can do more to pursue digital economy agreements with other partners in the world as a way to catalyse new areas of growth following the Covid-19 pandemic, Deputy Prime Minister Heng Swee Keat said on Tuesday.

"We need to think about new areas of growth - and the new areas of growth will be in areas like the digital economy as well as the green economy," Mr Heng said during a fireside chat moderated by Ambassador Ong Keng Yong on the opening day of the World Cities Summit.

This comes alongside the region's pursuit of economic integration, which is even more critical during this pandemic period where "the consensus for globalisation is fraying", he said.

Singapore, for example, has entered such digital economy agreements with New Zealand, Australia and Chile, he noted.

Within Asean, businesses and business chambers should be encouraged to work more closely together, he said.

"We can do a lot more and to stay open to collaborating with partners all around the world. While (there are) trade tensions between the US and China, the global economy is more than just the US and China, and so we should collaborate across different parts of the world - particularly in new growth areas," said Mr Heng.

However, being exposed to globalisation means dealing with structural changes in the economy becoming even more important, he said.

"So how do we ensure that our people are equipped to deal with these structural changes; and there, I think, cooperation in the areas of training, in the areas of human capital development will be quite critical," he said.

Asean is in a very good state to make full use of this since many parts of the region have a fairly youthful population, he said.

Mr Heng also noted that green financing is an important part of the overall agenda as the region moves towards a green recovery.

"The question is how to do that well because the high quality projects are important. What you don't want is to have what some people call, cynically, 'greenwashing'," he said.

This means the verification of whether a project - as well as disclosures by financial institutions - is truly green is important, he said, adding that this is why the Monetary Authority of Singapore has set up a task force to set guidelines.

Meanwhile, Asean accounts for only 3 per cent of global green finance, he said, which means "there is quite a lot of catching up to do".

"I remain optimistic that the Asian region will recover from Covid-19, will continue to grow . . . the fundamentals have not been damaged," he said.

"If so, we really must aim for better recovery - and the green recovery must be an important part of our agenda," he added.