AEC's digital economy to hit US$1 trillion by 2030: strategic plan unveiled

New Straits Times

28-05-2025

KUALA LUMPUR: The impact of enhancing the digital economy via the Asean Economic Community (AEC) Strategic Plan 2026-2030 will be immense because the region's digital economy is projected to reach US$1 trillion by 2030, an economist said.
KSI Strategic Institute for Asia Pacific economic advisor Dr Anthony Dass said this will be a key priority, and the newly binding Digital Economy Framework Agreement (DEFA) plays a significant role in increasing regional economic integration.
"The digital economy contributes by facilitating cross-border trade, promoting innovation, enhancing connectivity and attracting investments into the region. A robust digital infrastructure fosters innovation, leading to new digital services, platforms, and business models that drive economic growth.
"DEFA aims to address cross-border challenges and tackle issues like online fraud and misinformation, ensuring a safer and more trustworthy digital environment. Digitalisation will also streamline business processes, enhance productivity, and reduce operational costs across various sectors," he told Bernama.
Nevertheless, Dass said significant differences in development levels, regulatory capacity, infrastructure, and digital skills across Asean member states pose challenges to the effective implementation and widespread benefits of DEFA.
"Ensuring data free flow with trust while balancing data protection and national sovereignty is also a complex task," he said.
Increase Asean economic resilience
The potential of the AEC Strategic Plan to enhance regional economic integration is significant, given the lessons learned from the AEC Blueprint 2025, with its 97 per cent implementation rate.
"The new plan is designed to be more dynamic and adaptable, moving beyond a 'business-as-usual' approach. By focusing on action-oriented, sustainable, dynamic, adaptable, agile, and inclusive strategies, the plan aims to create a more integrated and cohesive economy.
"The emphasis on sustained growth and competitiveness, and the commitment to deeper integration through digitalisation, innovation, and sustainability, suggest a strong foundation for future progress," he said.
He said the plan's effectiveness and potential impact will largely depend on the political will and implementation, and its adaptability to global shifts.
Dass said its outline of six strategic goals, 44 objectives, and 192 strategic measures demonstrates a comprehensive and detailed approach to advancing regional growth.
"While the plan is robust on paper, consistent political will and effective implementation across all member states are paramount. Past experiences show that disparities in development levels and regulatory capacities can hinder progress.
"The current global economic landscape is characterised by rapid technological advancements, supply chain disruptions, and evolving trade dynamics. The plan's emphasis on 'agile and forward-looking strategies' suggests an awareness of this, but its actual ability to adapt to unforeseen challenges will be critical," he said.
While the upgraded Asean Trade in Goods Agreement (ATIGA) is crucial for reducing trade barriers, he said the plan's effectiveness hinges on its ability to tackle persistent non-tariff barriers, particularly in critical services like finance and banking.
"Additionally, the plan's development involved extensive engagement with various stakeholders. Continued engagement with governments, the private sector, civil society, and regional organisations will be vital for its successful implementation and to ensure that the benefits are widely distributed," said Dass.
Shorter timeframe
The AEC Strategic Plan, with its shorter timeframe of between 2026 and 2030, presents both opportunities and challenges.
It allows the plan to quickly adapt to evolving global and regional dynamics. Hence, more responsive to emerging challenges and opportunities.
"A five-year horizon can lead to concentrated efforts and a greater sense of urgency in achieving targets. Shorter cycles would allow for more frequent reviews and adjustments, ensuring the plan remains relevant and impactful," Dass said.
Nevertheless, it is "highly ambitious" trying to achieve significant structural reforms and deep integration within a shorter period, given the diverse development levels among member states, he said.
"Some initiatives, particularly those related to capacity building or institutional strengthening, may require a longer period to show their full impact. Maintaining consistent coordination and momentum across 10 diverse economies within a compressed timeline can be demanding.
"Therefore, the effectiveness will ultimately depend on whether the shorter timeframe is utilised to foster greater dynamism and responsiveness, or if it leads to an overburdened agenda that struggles with comprehensive implementation," he said
Strengthening MSME Participation
The AEC Strategic Plan recognises Asean MSMEs as engines of growth and aims to strengthen their participation via various initiatives such as capacity building and digital readiness, access to finance and export markets and many more.
"The plan likely includes measures to improve MSMEs' access to financing and connect them with regional and global export markets, overcoming existing limitations.
"Addressing structural differences, inconsistent policies, and the absence of harmonised cross-border regulations that currently constrain MSME growth is crucial," he said, adding that financial assistance and awareness programmes are needed.
The plan also focuses on promoting inclusivity among MSMEs to empower youth and women entrepreneurs, ensuring that the benefits of integration are shared widely.
"Asean MSMEs will benefit from this plan because it increases competitiveness, expands market access, and promotes greater resilience, by displaying a diversification of markets and stronger support networks to help the MSMEs," said Dass.
Measuring the progress
Dass said Asean measures the progress of its strategic plans via a combination of mechanisms, drawing lessons from previous blueprints like the AEC Blueprint 2025, which include key performance indicators (KPIs).
"The bloc assesses progress, its overall effectiveness, identifies challenges, and draws lessons from it at the end of a plan's cycle," he said.
Asean will also conduct council meetings and other ministerial meetings to serve as platforms to review progress, discuss implementation issues, and provide guidance, he said.
"These mechanisms ensure accountability, identify bottlenecks, and enable necessary adjustments to achieve its economic integration goals," he added.
The leaders of the 10-member grouping recently adopted the AEC Strategic Plan to elevate the bloc's position as the world's fourth-largest economy.
The plan will move to the implementation phase with each AEC sector developing its sectoral plans, translating strategic objectives into concrete actions, timelines and performance indicators.
Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the plan is a comprehensive roadmap that will be part of the overall Asean Community Vision 2045 (ACV 2045).