Asean’s economic integration needs to be extended to digital and green sectors: PM Lee
Janice Lim
[JAKARTA] Asean’s foundational economic agreement needs to be updated to cover digital and green economic activities, as part of broader efforts by the regional bloc to establish a single market, said Singapore Prime Minister Lee Hsien Loong said on Tuesday (Sep 5).
He added that the digital and green economies are new growth areas, and urged leaders to move quickly to develop them.
As the regional bloc works towards a 2045 vision aimed at meeting the aspirations of its citizens, economic integration needs to remain at the core of its agenda, said PM Lee, who was speaking at the plenary session of the 43rd Asean Summit held in Jakarta, Indonesia.
With a young and tech-savvy population, Asean is home to some of the world’s fastest-growing economies. The region is the world’s fifth-largest economy, with a combined gross domestic product of US$3.6 trillion, and is projected to become the fourth-largest by 2030.
Officially opening the 43rd Asean Summit on Tuesday, Indonesian President Joko Widodo, as the current chair for the regional bloc, called for unity among Asean members, as well as its external partners as they “sail together towards the epicentre of growth”.
Representatives from all member states attended the opening ceremony as well as the plenary session held after, except for Myanmar, whose ruling military junta has been banned from formal Asean summits since the coup in February 2021. Prospective member Timor-Leste’s Prime Minister Xanana Gusmao attended as an observer.
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Economic integration
Besides upgrading the agreement governing the trade of goods among Asean member states to include the digital and green sectors, PM Lee said at the plenary session that the launch of negotiations on a framework for the grouping’s digital economy is another important step towards economic integration.
“We must work towards a Defa (Digital Economy Framework Agreement) that is forward-looking and drives inclusive growth, that creates opportunities by improving digital connectivity, skills and literacy in the region, and tangible benefits our businesses and people,” he said.
Negotiations on the Defa were launched on Sunday by the bloc’s economic ministers after a study identified nine core elements, including digital trade, cross-border e-commerce and digital payments, to be covered in the discussions. According to the study by the Boston Consultancy Group, a high-quality Defa is projected to double the region’s digital economy from US$1 trillion to US$2 trillion by 2030. Negotiations are targeted to conclude by 2025.
As for the green economy, PM Lee said that the energy transition to lower-carbon economic activities is critical to Asean’s sustainable development and continued prosperity.
He reiterated Singapore’s commitment to the construction of an Asean power grid, and that the Republic had renewed the memorandum of understanding for the grid. Besides developing its infrastructure, harmonising standards for the cross-border export of energy is also key.
PM Lee also welcomed the feasibility study on cross-border power trade among Brunei, Indonesia, Malaysia and the Philippines, which was launched on Monday.
“Beyond the Asean power grid, we should collaborate in other areas to enable our green transition, such as carbon trading and capacity building, and work with external partners who have greater expertise in such areas.”
In addition to economic integration, PM Lee said that Asean needs to strengthen its ability to address emerging challenges on cybersecurity and food security.
To improve the bloc’s decision-making process in emergency situations, he said there was a need to strengthen the Asean Secretariat and optimise the role of the secretary-general to enable them to support the region’s priorities more effectively.
“Ultimately, a more integrated and well-functioning Asean strengthens Asean centrality, and enhances Asean’s relevance and competitiveness in a post-pandemic world.”
Jokowi, as the Indonesian President is more popularly known, also spoke about the increasingly complex geopolitical challenges, amid which external powers vie for influence over Asean. The regional grouping has found itself being pulled in different directions as tensions continue to mount between rivalries, such as that between the United States and China.
However, Jokowi said in his summit opening speech that Asean will not be a proxy for any power.
“Do not turn our Asean ship into an arena for rivalries that cause mutual destruction. Instead, transform this Asean ship as a space to nurture cooperation, to achieve prosperity, stability and peace, not only for region, but also for the world,” he said.
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