On facilitating economic integration to boost regional prosperity
On facilitating economic integration to boost regional prosperityConsidering the 2020 ASEAN BAC theme of “Digital ASEAN for Sustainable Development”, what do you see as the main barriers to the creation of an integrated digital economy for the region?
DOAN DUY KHUONG: The number-one barrier is inadequate access to digital tools, primarily due to the high costs involved. Limited access to high-quality and high-speed broadband is also an important factor, especially for micro-, small and medium-sized enterprises (MSMEs) in rural and remote areas. Many MSMEs have limited understanding of digital technology, and there are big gaps within the workforce in terms of digital skills. On top of that, MSMEs lack engagement in cross-border trade due to the complexity of trade processes and logistics infrastructure requirements. MSMEs need more seamless cross-border payment options to sell overseas through online channels. Lastly, MSMEs see difficulties in navigating tricky digital regulations and starting a business.
To solve these issues, member states need an ASEAN-wide framework to promote digital integration. The focus must be on improving digital connectivity, facilitating commerce and trade, building a resilient digital and business ecosystem, and improving the digital skills of the workforce.
Integration barriers present a challenge, particularly when protectionist tendencies remain prevalent among those countries that want to support their domestic industries or feel they lack the resources to compete. This is why the more advanced members of ASEAN should act like a big brother to less advanced countries.
Taking into account Vietnam’s participation in several multilateral trade deals, how do you evaluate the prospects for the Regional Comprehensive Economic Partnership (RCEP) to boost trade and contribute to higher standards of living?
KHUONG: The RCEP forms the world’s largest free-trade bloc. Member countries will enjoy the open market for goods and services, investment opportunities, facilitated trade and simplified Customs procedures. The RCEP will be a very important milestone for Vietnam in our journey of global integration, especially against a backdrop of increasing protectionism around the globe.
The RCEP, along with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement, will give Vietnamese businesses unprecedented opportunities to find markets for their products and services. The RCEP is expected to boost the region’s value chain and contribute to the development of all participating economies.
As the US-China trade war continues to cause disruption, to what extent could greater intra-ASEAN trade help safeguard against external economic turbulence?
KHUONG: The sooner ASEAN becomes more economically integrated, the stronger the region will be to face any type of external disruption. Once we work together effectively to raise and institutionalise our standards, processes, regulations and services, we can be more effective at attracting international investors and businesses to ASEAN, thereby becoming less dependent on a few large economies.
In what ways could the ecosystem for innovative entrepreneurship in ASEAN be strengthened?
KHUONG: Regulators should be supportive of innovation by establishing sandboxes to provide space for innovators to experiment, and they should work with the private sector to develop business-friendly policies. We see many regional examples of regulatory sandboxes, such as in Singapore for financial technology and in Malaysia for smart cities, agricultural technology, digital health, clean energy and mobility. Thailand even has a smart visa programme, which is a kind of start-up visa to encourage foreign entrepreneurs and investors to bring their talents and money into the local start-up ecosystem.
Singapore is the innovation leader in ASEAN; it acts as a centre that consolidates all information on the ecosystem to help entrepreneurs navigate regulatory requirements and learn about government support programmes. Vietnam is in the process of establishing the National Innovation Centre (NIC), and one of our priorities for economic integration in 2020 will be to expand the NIC network throughout ASEAN to share best practices among member countries.
The private sector is always ahead of governments in instituting innovation, given its capacity to invest in research and development, but if businesses and innovators work in silos, progress will be much slower. What we need is an effective platform where the sharing of ideas and experiences can freely flow within ASEAN, as well as between us and our more developed dialogue partners.
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