From G20 to ASEAN: Indonesia Roles on Enhancing Digital Transformation in Southeast Asia
Written by: Darline Lanek & Salsabila Nada N.
Introduction
G20 is a strategic multilateral platform which connects the world’s major developed and developing countries with the status of emerging economies. The G20 has a strategic function in shaping the future of global economic growth and prosperity (G20.org, 2022). From December 1, 2021 until November 30, 2022, Indonesia became the host of the G20 summit by proposing “recover together, recover stronger” as the grand theme of the forum. To realize this theme, Indonesia, as the presidency holder, has proposed three priority sectors: Strengthening Global Health Architecture; Digital Transformation; Energy Transition. This article will focus on the second aspect, digital transformation. This second aspect has become one of the most contentious issues discussed in the G20 because there is a gap between the Global South countries and the Global North countries. Therefore, Indonesia, as one of the Global South, carries an essential role in creating an inclusive environment to advance the digital transformation in the Global South area, including the Southeast Asia region.
Regarding the influence of the G20 and Indonesia’s strategic role in shaping its agenda as one of the ASEAN member states (AMS), we are trying to analyze the significance of the digital transformation on AMS. We are going to specifically focus on Indonesia’s agenda for digital transformation by portraying it in the Southeast Asia context, mainly because most of the ASEAN countries are classified as the Global South. This article also presents the digital divide between the ASEAN countries as the main problem of digital transformation. We offer a multi stakeholder approach as the solution to the digital divide concern. In the end, we will also attempt to show how the global south can lead the digital transformation aspect in Southeast Asia.
Digital Divide as the main Barrier to Digital Transformation in Southeast Asia
Throughout time, the digital divide has been the main concern in developing convenient digital transformation in Southeast Asia. This part will present the digital divide in Southeast Asia by using modern information and communication technology (ICT) terms which refer to the level of convergence of telephone networks, the Internet, artificial intelligence, big data, and social media applications (Zuppo, 2012 in Xiong, Zang & Gao, 2021). The ASEAN’s member states have diversified circumstances in accessing ICT. This issue caused a gap between countries that can access the ICT adequately and those that do not (Tsauro & Felayati, 2016). Advanced countries like Singapore are far superior in digital transformation to the rest of the ASEAN’s members. If we glance at the internet penetration in Southeast Asia, only three countries have over 80% internet penetration, with Singapore leading the statistics, followed by Brunei and Malaysia (Jalli, 2020). As it is known, internet penetration is the portion of the population that has access to the Internet, which is measured by the percentage of internet users in the country. Therefore, we can detect the ICT quality of a country by measuring the internet penetration because it shows the number of people who can access the Internet. For countries like Indonesia, the most populated country in the region, only 56%, with only 150 million of its 268 million population, have access to the Internet (Jalli, 2020). Thailand, Myanmar, and Vietnam also have less than 60% Internet penetration, with 57%, 39%, and 38%, respectively, in 2019 (Jalli, 2020). Referring to this data, we can see that the AMS is still encountering problems with the ICT quality that will affect the inclusiveness of digital transformation.
The government worldwide, including the ASEAN countries, have been implementing lockdown policy and limiting people from interacting directly. The lockdown policy has resulted in a massive shift toward digital-based platforms for people to interact and do their activities. Now in 2022, every country has familiarized itself with digital-based systems, which resulted in better conditions for digital transformation (ERIA, 2021). The ASEAN’s member states thus have made remarkable progress in digitalization and economic recovery (ERIA, 2021). Nevertheless, problems like digital divide are still one of the problems that each AMS faces.
The digital divide is still happening through an immense inequality in each AMS as the effect of the Covid-19 pandemic. The Covid-19 pandemic has resulted in rising unemployment, which negatively affects a country’s economic growth. When people consume far less than usual, the ICT progress will be hampered. It happens because the high cost of ICT services is related to productivity income in a country (International Telecommunication Union, 2021). The Covid-19 pandemic, with a high demand and ICT quality values, has further escalated the price (International Telecommunication Union, 2021). However, globally, between 2019 and 2020, the price of low-usage basket decreased by more than 8 per cent (International Telecommunication Union, 2021). As we know, a low-usage basket is a mobile service package consisting of 70 minutes of voice, 20 SMS and 500 MB of data. Therefore, the low-usage basket can be an alternative for developing countries of the AMS to provide ICT access.
Nevertheless, although mobile data and voice-low usage basket are pretty accessible, the internet connectivity used for low-usage basket is relatively higher than high-usage basket. The problem with the low-usage basket is that there will be any hidden cost for the user to enhance their internet connectivity using this package (International Telecommunication Union, 2020). In addition, the high-usage basket offers better quality and amount to the user. However, the high-usage basket is not actually affordable because this package is 8,2% more expensive than the low-usage basket in low-income countries (International Telecommunication Union, 2021). In contrast, both basket prices in high-income countries are nearly the same (International Telecommunication Union, 2021). Ultimately, the ICT services nowadays are not quite inclusive because there is still a gap, especially between the high-income countries like the global north and low-income countries like the global south, which is most of the AMS.
Promising Roles of Indonesia in Addressing Digital Divide
From the government side, the ICT facilities are often under-explored, and even if it is explored, the government is dependent on the global north technology. This situation is rough for the global south, including ASEAN, which is the biggest consumer in ICT. ASEAN countries, especially Indonesia, have a massive population that are considerably passive in the ICT and Digital Transformation. On the other hand, by becoming the host of this year’s G20, Indonesia is expected to represent the Global South position as more engaged in digital transformation. Indonesia will also represent the global south in Southeast Asia with enhanced digital skill and digital literacy to create an inclusive digital transformation.
Besides that, Indonesia’s role will encourage other AMS, such as Myanmar, Cambodia, and Lao PDR, which have lower ICT quality. As the president of the G20 summit, Indonesia has the credibility to understand the complex ecosystem of digital transformation. Indonesia will also have some familiarity with the digital transformation that can be transferred to other AMS, and the credibility of Indonesia can also attract investors. By successfully holding the G20 summit, the investor will have a more precise notion of the future of digital investment in Southeast Asia. As a result, the investor would likely invest in Southeast Asia’s digital infrastructure. Furthermore, the opportunity to receive tech transfer will ensure the active role of the AMS, learn the skills, and enhance the awareness to utilize digital services. In addition, there is also the ASEAN Comprehensive Recovery Framework (ACRF), which is an implementation plan for accelerating inclusive digital transformation through digital technologies to boost the economy, improve society in the post-COVID-19 era and achieve long-term resilience (Government of Brunei Darussalam, 2021).
At last, to realize sufficient digital transformation in the global south, especially in the ASEAN, Indonesia can not stand alone without the contribution of the AMS. Indonesia can be the actor to encourage and initiate concrete results in digital transformation sectors because of its credibility in leading the G20. One of the ways is by promoting an action plan such as the European Union Digital education action plan and enhancing the ASEAN Economic Community by creating a master plan toward an inclusive digital transformation in Southeast Asia. Likewise, Singapore’s role is also important because it advances in digital transformation and its involvement as the guest of the Indonesian G20 presidency. By working together, the difficulty of creating an inclusive digital ecosystem in Southeast Asia can be decreased.
Navigating ASEAN Work Plan on Digital Gap
As seen through the digital gap amongst ASEAN nations, states and impacted stakeholders confront the same challenges in promoting inclusive economic growth. Growing potentials but also accompanied by endless challenges put the actors in an inescapable situation. Along with COVID-19 pandemic in making the situation more complex, digital divide becomes inevitable in AMS. Although one of AMS–Indonesia–has recorded many efforts in transforming the digital domain in Southeast Asia, it is important to note that ASEAN had also established a framework to enhance connectivity between AMS. The Master Plan on ASEAN Connectivity (MPAC) 2025 was developed to promote the adoption of digital technology, especially by micro, small and medium enterprises (MSMEs) in AMS. The objective of MPAC 2025 is to increase engagement in the digital economy and maintain a setting where stakeholders can go to their best extent. The MPAC 2025 also aims to enhance the usage of open data and digital data management by building an ASEAN open data network and an ASEAN framework for digital data governance (ASEAN, n.d.). While an ASEAN digital data governance framework encourages collaboration among AMS toward the protection of personal data in ASEAN, an ASEAN open data network enables individuals and governments to work together in making informed decisions towards the delivery of public services (ASEAN, n.d.) Along with an established framework, digital connectivity shall be able to be addressed in overcoming the digital divide between countries in Southeast Asia.
However, to implement such master plan requires a multi stakeholder approach to achieve comprehensive performance. Assessment of the implementation progress then became a crucial aspect, therefore leading to the publication of the Mid-Term Review of the Master Plan on Connectivity (MPAC 2025). Although the Mid-Term Review of the Master Plan on Connectivity (MPAC 2025) revealed that robust frameworks for digital data governance might enable digital trade to promote exports of over $100 billion and advantages for technology adoption of $281 billion by 2030, it is important to note that MSMEs still have limited movements to integrate themselves into the digital environment. These limited movements are highly related to the changing context, especially during the COVID-19 pandemic. MSMEs are faced with the need to adjust themselves in such short notice. Besides having to adapt in a complex situation, they must come up with quick but also adequate decisions, leading them to limited movements.
Shofa (2020) noted that the multi stakeholder approach appears to be a significant step in creating possibilities for more comprehensive performance of MPAC 2025. Mainly on the states’ permissibility for the work plan to be implemented comprehensively, Shofa (2020) also mentioned that the private sector has a great deal of information that ASEAN could utilize to guide political decisions and the provision of public services. Quoting from Aladdin D. Rillo, the Deputy Secretary-General for ASEAN Economic Community, Shofa (2020) urges the private sector to offer digital tools for supply chain mapping and monitoring, primarily because a robust supply chain would support a rapid post-pandemic recovery of the economy. The multi stakeholder approach had also been emphasized implicitly in the Mid-Term Review of the Master Plan on Connectivity (MPAC 2025) when it revealed one of the six key challenges being national level implementation. These include the absence of critical data at the national level, unclear responsibilities and restricted incentives among National Coordinators (NCs) and National Focal Points (NFPs), and alignment with relevant agencies’ goals in AMS (ASEAN Secretariat, 2020).
Conclusion
Issues revolving around the digital divide in Southeast Asia have seen its uprising urgency and showing the importance of addressing digital transformation on AMS. Most of the time, the ICT services are not always available and inclusive for certain parts of people; creating another economic structural issue since not everyone can access them. The forum provided by G20 shows Indonesia as one of the key actors in enhancing the digital transformation. Indonesia as the president of G20 can encourage other Global South countries, especially Southeast Asia countries, to enhance digital transformation. Other than that, the framework established by ASEAN called the Master Plan on ASEAN Connectivity (MPAC) can also drive AMS to navigate their digital domain. However, a multi stakeholder approach shall be noted to achieve comprehensive performance.
References
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