(Op-Ed) EU & ASEAN must step up digital connectivity ties amid rising geopolitical tensions

By Professor Yeo Lay Hwee, Vice-Chair of ASEANCHAM-EU.

(This article first appeared in the EUobserver on 27 December 2022).

The recent signature of an air-connectivity agreement between the EU and the Association of Southeast Asian Nations (ASEAN) provides some good news in challenging geopolitical times.

The EU-ASEAN Comprehensive Air Transport Agreement (CATA), signed in October during an ASEAN transport ministers meeting, is the result of years of tough negotiations. It is expected to provide greater opportunities for ASEAN and EU airlines to operate passenger and cargo services between and beyond both regions, helping to bolster the recovery of air connectivity between the two regions following the Covid-19 pandemic.

But CATA also has ramifications beyond immediate benefits of increased inter-regional connectivity, by signalling the increased importance of regional blocs like the 27-member EU and the 10-member ASEAN and their ability to exercise more agency and leadership.

And the next area that the EU and ASEAN need to focus on is digital connectivity.

Both EU and ASEAN face economic headwinds caused by the war in Ukraine, and geopolitical tensions arising from challenges to the current world order. While the global security order remains dominated by the US, increasingly, the world is becoming more multi-polar and multi-stakeholder-driven.

The EU needs to strengthen its autonomy and ASEAN needs to regain its centrality as different powers and stakeholders jostle to shape the global or regional economic order and influence the climate and digital agendas.

The digital sphere is particularly complex, with a diverse range of actors and stakeholders. Working closely with each other and other like-minded partners in the Indo-Pacific, the EU and ASEAN can be voices of moderation.

Instead of allowing any single issue to dominate the global agenda, EU and ASEAN can work pragmatically to exercise joint leadership in functional areas where their interests and priorities converged.

The digital sphere is one of these areas.

Southeast Asia’s digital economy has reached a whopping $282bn [€272bn] in 2022. With a population of 680 million comprising an expanding middle class eager to participate in the digital economy, the region’s digital economy is projected to reach $1 trillion by 2030.

ASEAN has made a collective commitment towards the development of an integrated ASEAN digital economy. The ASEAN Digital Masterplan 2025 further envisions ASEAN as a leading digital community and economic bloc powered by secure and transformative digital services, technologies and ecosystem.

Digital transformation has been on ASEAN’s radar for some time now. Covid-19 has accelerated the pace of digitalisation in ASEAN and the region has evolved into one of the fastest-growing digital markets in the world. Negotiations towards an ASEAN Digital Economy Framework Agreement have just been launched.

As a trusted strategic partner of ASEAN, the EU is in a good position to work with the region to increase digital connectivity and build interoperable and standard-based systems.

The EU and Singapore have already launched discussions on a comprehensive and forward-looking digital partnership, a deal which aims to provide an overarching framework to strengthen digital connectivity and interoperability of digital markets and policy frameworks and facilitate digital trade between the EU and Singapore.

That agreement can be a pathfinder and template for a wider bloc-to-bloc EU-ASEAN digital agreement, which in turn could contribute to the development of a global architecture of interoperable standards. Shaping the future digital order with an open and inclusive approach towards multi-stakeholders is increasingly important in the light of Sino-American tensions and the danger of technological bifurcation.

The EU’s determination to promote a sustainable, people-centric vision for digital transformation is in line with ASEAN’s vision for a digitally-inclusive economy and society.

More investments would be needed to reach this vision, not only in hardware — high-speed broadband and fibre-optic networks — but also in designing regulatory regimes with proper incentive structures and governance.

There is also a lot to be gained if ASEAN and the EU step up cooperation to build digital literacy and skills of their people needed to benefit from digitalisation. Instilling the mindset of lifelong learning is also important given the exponential pace of technological change.

With that in mind, more EU-ASEAN exchanges among institutions of higher learning, as well as vocational institutes and those dedicated to lifelong learning, should be should be stepped up.

Last but not least, the EU and ASEAN should truly collaborate in rule-setting for digital connectivity. This is how a EU-ASEAN strategic partnership can be truly meaningful and contribute to a more inclusive rules-based order that can underpin sustainable peace and development.