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Policies needed to boost ASEAN’s digital economy

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DESPITE high participation in digitally-enhanced services trade among members of the Association of Southeast Asian Nations (ASEAN) between 2010 and 2016, policies to improve broadband penetration are needed to boost economic growth, especially in the Philippines and Indonesia, according to the World Bank.

The World Bank’s “The Digital Economy in Southeast Asia — Strengthening the Foundations for Future Growth” report released on late Thursday said the Philippines was the one of the largest participants in digitally-enhanced services trade in the ASEAN in 2010-2016.

“Of the region’s larger middle-income countries, the Philippines grew to become the largest participant in this type of services trade, growing by 149% to overtake Malaysia, whose total trade grew by a more modest 36%,” it said.

“Levels of economic development partially explain the disparity among the ASEAN economies, but regulatory factors are quite significant. In particular, the broadband penetration level of countries such as Indonesia and the Philippines is below the expected level of countries at their comparable per capita income,” the report said.

The report said 90% of the internet users in the region are from Indonesia, Malaysia and the Philippines.

It said the number of internet users in ASEAN increased to 390 million by end-2017 from 127 million in 2011.




“The Philippines ranks 126 out of the 182 countries measured by the ITU (International Telecommunication Union) with entry-level fixed broadband prices at 7.53% level of GNI (gross national income) per capita. Indonesia ranks even lower at 133rd and its fixed broadband costs nearly 10% of GNI per capita despite offering a low speed of 0.25 mbps,” it said.

The World Bank said cooperation is needed as an integrated regional market will be more competitive than individual economies with overlapping or unclear regulations.

“From a wider perspective, no individual country is large enough to shape the direction of regulation on the digital economy, for example in areas such as taxation or data policy but collective and coordinated action based on a principle of openness would put the region in a much stronger position,” it said. — RJNI