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Embassy attending the 4th OECD Southeast Asia Forum on Digital Transformation in Southeast Asia

On Thursday 24 August, the Norwegian Embassy represented by chargé d’affaires Mr. Vegard Holmelid and political officer Margrethe Rosbach, attended the 'OECD-Southeast Asia Forum on Digital Transformation’. The development in the digital economy of Southeast Asia is important for Norway, not the least since Norway from last year is an official Sectoral Dialogue Partner with the ASEAN-region, and because of Norway’s significant strategic business interest in this area of economic cooperation.

Based on the shared understanding that digitalisation is intrinsically linked with development, the main objective of the Annual OECD Southeast Asia Forum was to assess the opportunities and the various policy challenges of digital transformation in Southeast Asia. The key message was that digitalization in Asia must be inclusive and sustainable. In order to ensure this, a digital transformation will require close collaboration between individuals, businesses and the government.

 

Digitalisation as an instrument of integration and development in ASEAN

In his opening remarks Deputy Minister of Thailand Mr. Virasakdi Futrakul underlined the importance of the OECD Southeast Asia forum. He noted that not only does the forum serve as a platform for sharing policy experiences and practices across regions, but it also reflects a deepening relation between the OECD-countries and Southeast Asia. In his remarks he pointed out that digitalisation and connectivity serves as a precondition for deeper regional integration, continued economic growth and development, and for dealing with the security challenges presented by the current geopolitical climate.

 

Challenges of digitalisation

However, digitalisation also comes with profound challenges. As Secretary General of the OECD Mr. Angel Gurria and several of the other speakers noted, one of the major challenge with digitalisation is the amplification of inequality. Surely, digitalisation will create new jobs and can for instance enable easier access to public services. However, as we become more connected and more dependent on digital networks, those without access or without the skills to operate in a digital world, will risk falling further behind. Hence, the inequality gap often found in the divide between the urban and rural population, but also between countries, is at risk of being further worsened.

Some control is ok, but do not overregulate

Mr. Angel Gurria also pointed to the challenges with cyber-security and noted that greater dependence on digital networks leaves governments and businesses prone to cyber-attacks. For the individual there is also the issue of privacy in the digital world. How does the government ensure that the privacy of its people is respected? In several Southeast Asian countries, governments have adopted strict regulations prohibiting operators from storing data from their users outside local or national borders. This has created a significant problem for operators that provides services in several countries. Unfavorable regulatory framework can further discourage businesses from investing in Southeast Asian countries. This in turn lowers competition, which again has an effect on quality, price and access.

In her summary of the panel discussion Annika Markovic, swedish Ambassador and Permanent Representative to the OECD, highlighted the issue of over-regulation, and urged governments in Southeast Asia to de-regulate and adopt a light-touch approach to encourage innovation and spur competition. The need for greater competition and a light-touch approach by governments, was further emphasized by several of the speakers.

A common approach

In dealing with these challenges and ensuring that Southeast Asia is fully benefitting from the opportunities of digitalisation, all the speakers seemed to agree on one coherent approach focusing on the balance between the social and security interests, with the economic interests. Firstly, governments and businesses must work closely to enhance digital skills and the level of human resource capital in the region. Secondly, governments must provide a favorable regulatory framework that incentivises businesses to operate and expand their services throughout the region. Thirdly, governments and businesses must provide the necessary infrastructure to expand the access to digital networks. Moreover, the region must develop a coherent and collaborative strategy to face the challenges with cyber-security.

In the second session of the forum, country representatives from both private and public sector shared the experiences with digitalization from their country.

The key lessons from these discussion among representative of Asian countries is that South East Asian nations must develop and implement a strategy for digitalisation. All countries see the potential economic, social and security benefits of digitalization. Nonetheless, several countries are still struggling with the private-public sector collaboration and the balance between regulation and liberalization.

Moreover, there is an infrastructure deficit in some countries which affects the access and quality of services, and thus in turn negatively impacts the existing local and regional inequality gaps. In order to deal with the challenges and benefit from the opportunities of digitalization, South East Asian countries must develop a common strategy for how to make the digital transformation sustainable and inclusive.

The annual OECD outheast Asia Forum has been taking place since 2014. The theme of this year; “Digital Transformation in Southeast Asia”, derives from the pressing need for greater connectivity in Southeast Asia. The Forum is part of a joint cooperation programme between the OECD and ASEAN.