Digital public infrastructure

This post is written by Hazremi Hamid, Senior Officer Digital Economy, ASEAN Secretariat.

• The problem: In today's rapidly evolving digital landscape, the role of digital public infrastructure (DPI) has become increasingly vital in shaping the future of societies.
• Why it matters: The Association of Southeast Asian Nations (ASEAN) has embraced this digital revolution by launching the Digital Economy Framework Agreement (DEFA) in September 2023, making ASEAN the pioneer region that is ready to move forward a legally binding agreement on the digital economy. DPI serves as the enabler for DEFA, supporting ASEAN's digital transformation through market integration by leveraging its core principles.
• The solution: Through the development of DPI, ASEAN aims to empower its citizens by ensuring equal access to digital opportunities, facilitating smooth cross-border data flows to bolster regional integration, and establishing the foundational framework for the ASEAN Stack.

In today's rapidly evolving digital landscape, the role of digital public infrastructure (DPI) has become increasingly vital in shaping the future of societies. DPI, which encompasses the technology and systems that underpin the delivery of public services, enhance government operations, and improve citizens' lives. DPI is defined as a building block that allows interoperability, open innovation and allows others to innovate and build on top.

DPI serves as the enabler for the Digital Economy Framework Agreement (DEFA), supporting ASEAN's digital transformation through market integration by using its core principles. Some of DPI innovations in ASEAN, which include digital trade, digital identity (ID), digital payment and cross-border data flows, will establish the foundational framework for the ASEAN Stack.

The ASEAN digital economy is growing rapidly, with the market size expected to exceed $300 billion by 2025, according to a report by Google, Temasek, and Bain & Company. The acceleration in digital adoption has enabled the ASEAN digital economy to reach $200 billion in Gross Merchandise Value (GMV) in 2022, with projections indicating exponential growth to $1 trillion by 2030. In today's rapidly evolving digital landscape, the role of digital public infrastructure (DPI) has become increasingly vital in shaping the future of societies. DPI, which encompasses the technology and systems that underpin the delivery of public services, enhance government operations, and improve citizens' lives. DPI is defined as a building block that allows interoperability, and open innovation and allows others to innovate and build on top.

"DPI, which encompasses the technology and systems that underpin the delivery of public services, enhance government operations, and improve citizens' lives."

The Association of Southeast Asian Nations (ASEAN) has embraced this digital revolution by launching the Digital Economy Framework Agreement (DEFA) in September 2023, making ASEAN the pioneer region to move forward a legally binding agreement on digital economy. DPI serves as the enabler for DEFA, supporting ASEAN's digital transformation through market integration by leveraging its core principles. Some of DPI innovations in ASEAN include digital trade, digital identity (ID), digital payment and cross-border data flows that will be the basis of ASEAN Stack.

Under Digital Trade, the ASEAN Single Window (ASW) is a regional initiative that connects the National Single Window (NSW) of ASEAN Member States (AMS). The ASW objective is to expedite cargo clearance and promote ASEAN economic integration by enabling the electronic exchange of cross-border trade related documents among AMS which includes the ATIGA e-Form D, ASEAN Customs Declaration Document (ACDD) and e-Phytosanitary (e-Phyto) certificate. The number of e-Form D submissions increased from 500,000 in 2019 to over 1 million in 2022, resulting in an estimated saving of six million business operation days and $150 million in cost savings.

Underpinning the economy

Digital ID forms the foundation of a robust digital economy, enabling the seamless flow of cross-border digital trade — a relevance highlighted as ASEAN embarks on DEFA. ASEAN is now embarking on a study to leverage Digital ID for personal users among AMS with the aim of developing the ASEAN digital identity roadmap or guideline. That will accelerate the adoption and the interoperability between ID providers in ASEAN countries. Additionally, ASEAN is currently conducting a study to leverage Digital ID for personal use among AMS, aiming to develop the ASEAN digital identity roadmap or guidelines to accelerate adoption and interoperability among ID providers in ASEAN countries.

On Digital Payment, ASEAN is making strides by launching an ASEAN Cross-border QR code payment through real-time retail payment systems (RT-RPS) initiative. As of now, five ASEAN Member States – Indonesia, Malaysia, Thailand, Singapore, and Vietnam – have implemented one national QR code identification engaging in cross-border transactions with each AMS. This represents a proven use case for DPI, particularly in the domain of digital payments, fostering seamless financial integration within the ASEAN region.

On cross-border data flows, ASEAN is developing the ASEAN Interoperable Data Framework (IDF) to enable cross-border digital data flows for financial services. In addition, the EU-ASEAN Joint Guide on Model Contractual Clauses was launched in 2023 to assist businesses engaged in data transfers between ASEAN and the EU in navigating the data transfer landscape, streamlining data transfer processes, and improving business efficiency.

In summary, these four elements collectively constitute a shared DPI infrastructure, implemented in a decentralised manner, with the purpose of catalysing economic growth and fostering open innovation across ASEAN. Through the development of DPI, ASEAN aims to empower its citizens by ensuring equal access to digital opportunities, facilitating smooth cross-border data flows to bolster regional integration, and establishing the foundational framework for the ASEAN Stack.

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