Indonesia Urges on ASEAN Digital Economy Negotiations as DPI Strategizing Intensifies

Indonesia is pushing for the members of ASEAN to speed up negotiations over a proposed “Digital Economy Framework Agreement” (DEFA) that would include support for digital ID infrastructure. At the 24th ASEAN Economic Community (AEC) Council Meeting this week, Chief Economic Affairs Minister Airlangga Hartarto urged negotiators and the ASEAN Secretariat “to optimize the time this year to achieve the target of 50 percent completion of negotiations in 2024.”

ASEAN, or the Association of Southeast Asian Nations, is a regional organization comprising ten Southeast Asian countries that work together to promote political, economic, and security cooperation. Members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The proposed DEFA was one of the keystone achievements of Indonesia’s chairmanship of the alliance in 2023. The framework is meant to foster greater digital cooperation, pave the way for regional digital integration, and promote inclusive growth and development, with proponents anticipating that it could add up to $2 trillion by 2030 to ASEAN’s digital economy by the end of the decade.

DEFA has nine core elements: “Digital Payments and E-Invoicing”, “Talent Mobility and Cooperation”, “Cooperation on Emerging Topics”, “Competition Policy”, “Cross-border E-Commerce”, “Digital Trade”, “Digital ID and Authentication”, “Cross-border Data Flows and Data Protection”, and “Online Safety and Cybersecurity”.

Member states are hoping to conclude negotiations around the agreement sometime next year. Some of the issues to be hammered out, including digital ID and authentication, could have profound implications.

Earlier this month, a Malaysia-based company called Zetrix announced the launch of a new service meant to verify digital IDs published on Xinghuo BIF, a blockchain platform developed and overseen by China’s Ministry of Industry and Information Technology and the China Academy of Information and Communications Technology (CAICT).

The service appears benign in nature, and is intended to verify the identities of Chinese nationals when conducting digital transactions. Nevertheless, it represents an important extension of Chinese digital public infrastructure beyond its own borders.

The move came shortly after the Carnegie Endowment for International Peace, a prominent Washington think tank, issued a commentary note urging members of the informal “Quad” alliance – the United States, Japan, India, and Australia – to push the adoption of open digital public infrastructure as a counterbalance against China’s growing influence in the region.

Indonesia, for its part, typically attempts to remain neutral in such geopolitical rivalries. China is a major trading partner and has made significant investments in Indonesia’s physical infrastructure, while the U.S. is a key defense partner, regularly holding joint military exercises with Indonesia.

It’s part of Indonesia’s historical “Bebas Aktif” (free and active) foreign policy, which seeks to maintain independence as it pursues economic benefits. And that may be the motivating spirit behind Minister Airlangga’s comments at the AEC Council Meeting, where he advocated for “a two-stage approach in the negotiation process based on the existing categories and the readiness of each ASEAN member country.”

Source: Jakarta Globe

–

October 9, 2024 – by Alex Perala