Tengku Zafrul: Strong regulations will propel ASEAN digital economy to hit US$1-2 trillion in value by 2030
04 Sep 2023
A strong and unified regulatory regime can help Asean reap its potential digital economy value, which is expected to reach US$1-2 trillion (RM4.7 trillion – RM9.3 trillion) by 2030, up from US$300 million (RM1.4 billion) currently, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.
He said the rapid growth of e-commerce and availability of digital platforms such as social networks, and e-commerce marketplaces are an opportunity for small and medium-sized enterprises (SMEs) in Asean to increase their participation in domestic and international markets.
Citing “private intent data,” Tengku Zafrul said about 50 million SMEs use Facebook to find customers, with 70 per cent of their fans being domestic and 30 per cent from outside the country.
“Enhancing data flows will reduce transaction costs, promote the sharing of ideas, and enable users to make use of new findings and technologies. One way is to work towards a comprehensive regulatory framework to increase trust in intra-Asean data-sharing between stakeholders, comprising the reuse of both public and private intent data.
“While enabling the reuse of public intent data may be a more complex process, what we can consider today is to further enable the reuse of private intent data via regulations across Asean,” he said in his speech at the 2023 Asean Business & Investment Summit in Jakarta.
Tengku Zafrul also shared his experience as the former group chief executive officer of CIMB Group, where the bank successfully enabled the cross-border linking of accounts between CIMB Malaysia and CIMB Singapore.
The move has facilitated services such as providing competitive ringgit-Singapore dollar exchange rates for immediate, online fund transfers.
“This is a direct example of how regulatory harmonisation between two countries has built trust in sharing private intent data for cross-border banking transactions. The second example is the easing of the payment system for transactions.
“On this front, we must commend the banking regulators and central banks that have cooperated well in harmonising the regulations in this space,” he said, adding that today, payment transactions between Asean countries are also much easier as cross-border QR code is accepted.
These examples are significant in that they were facilitated in a highly regulated industry, such as banking.
“Imagine how much more we can achieve region-wide if we were to better harmonise regulatory practices on data-sharing across the board?” he asked.
Tengku Zafrul said regionally, multilateral arrangements to facilitate cross-border data flows include the Regional Comprehensive Economic Partnership (RCEP) provisions on e-commerce and the Asean e-Commerce Agreement.
The e-commerce chapter under the RCEP aims to create a conducive e-commerce environment through the protection of online consumers and online personal data as well as facilitating cross-border data flows.
He said improved coherence in data-related policies will create more trust, and boost e-commerce within the region, as well as between Asean and other international markets.Tengku Zafrul also called for the region to strengthen the implementation of the next level of Good Regulatory Practice (GRP) by building on the foundation that it has developed thus far to achieve unified standards to realize the region’s ambitions as a single market and production base.
He said this is because Asean countries are still in the early stages of developing their regulatory frameworks for sharing public and private intent data.
For that reason, he said policymakers and regulators should incorporate international best practices into their domestic legislative procedures.
“For private intent data, this includes introducing legislation or policy that encourages open data licenses between private firms, promoting the right to data portability for individuals, and access to a machine-readable format of data portability from say, one vendor to another.
“Asean countries should also seriously consider establishing mutual recognition arrangements and/or harmonising their data-related regulations both within and outside the region. This can also be taken up through the upcoming negotiations on the Asean Digital Economy Framework Agreement (DEFA),” he added.