The ASEAN member states are preparing to start negotiations for the Digital Economy Framework Agreement (DEFA) by the end of this year, to propel their digital economies and unlock USD2 trillion by 2030. The study on the ASEAN DEFA was endorsed during the 55th ASEAN Economic Ministers’ Meeting in Semarang, Indonesia. The study envisioned a harmonious digital landscape beyond existing agreements. ASEAN’s digital economy could naturally triple by 2030 to nearly USD1 trillion, with progressive DEFA rules potentially doubling this value contribution to USD2 trillion.
Investment flows to ASEAN countries in 2022 reportedly grew five percent, surpassing the global level and developed countries, according to Bahlil Lahadalia, Minister of Investment of Indonesia, at the 26th ASEAN Investment Area (AIA) Council Meeting in Semarang, Indonesia. The meeting was attended by all ASEAN members and representatives of the United Nations Conference on Trade and Development (UNCTAD). He added that the difference in investment flows to developing countries, which increased by four percent, starkly contrasts global and developed countries' investment flows.
ASEAN Economic Ministers stated at their 55th regional meeting that geopolitical tensions could disrupt international trade and supply chain links, blocking efficiency gains derived from globalisation. They warned that the situation could result in “economic fragmentation and increased policy uncertainty, ultimately diminishing market confidence, reducing investment, and adversely affecting long-term growth prospects in the region”. As such, there is now a greater need for resilience, deepening regional integration and advocacy for multilateralism of the ASEAN bloc in navigating the region's future economy on the back of global uncertainties.
The Malaysian government has taken significant steps in moving the country towards becoming a digitally enabled and technologically advanced high-income nation with clear goals, substantial investments, and partnerships, according to Communications and Digital Minister, YB Fahmi Fadzil. The minister laid out how Malaysia's digital economy is set to hit its goal of contributing more than 25.5% of the nation's GDP by 2025. He also added that Malaysia is doubling efforts to attract high-value foreign and domestic direct investments in digital fields such as AI and big data analytics," he said.
US companies have made investment pledges totalling RM100 billion in various sectors in Malaysia over the last 18 months, said US Ambassador to Malaysia, Brian McFeeters. He said these are significant investments in areas where the US wants to strengthen its presence, namely the electronics and semiconductor sectors and the data centre segment. He mentioned that US investments are coming strong into Malaysia, which is good for the US, as the country discovered during the pandemic that Malaysia is a key part of the world's supply chain.
