On the cusp

• Pages: 34-35

34 FINANCE & DEVELOPMENT | September 2018

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The Digital Potential

Economy Population

ASEAN has great potential to go digital, with its sizable economies, demographic dividend, and continuous regional integration

Source: IMF, World Economic Outlook (April 2018). Source: IMF, World Economic Outlook (April 2018).

If ASEAN were a single economy, its GDP would be the

5th largest in the world.

ASEAN has the 3rd largest population in the world.

More than 50% of its people are under 30 years old.

©ISTOCK/ L_KRAMER

HOMEGROWN RIDEHAILING APPS, intelligent tra c

systems, advance d construction techniques, auto-

mated energy-consumption mana gement all propel

the innovation wave washing over the A ssociation

of Southeast Asian Nations (A SEAN).

Indonesia’s vibrant digital ecosystem, for exam-

ple, boasts more than 1,700 start-ups—a mong the

world’s largest clusters of new rms. GO-JEK, to

name one, evolved from a ride-hailing app to a plat-

form for mobile payments and other digital ser vices.

In Singapore, Sea, the most valua ble start-up in the

region—worth several billion dollars—began as

an online gami ng company and branched out into

mobile money a nd shopping.

ASEAN is young (more than half of its 643

million people are under 30) and has a n econ-

omy of $2.8 trillion. Its 10 members are moving

toward greater economic integration. e region

should be at the tip of the digital spear. But it’s

not that simple .

e Internet has reached most people in Brunei

Darussal am, Malaysia, and Singapore, but more than

70 percent of Cambodia, Indonesia, Lao P.D.R., and

Myanmar remain s oine and can’t fully participate

in the digital economy. High-speed broadband is even

more scarce. ASEA N trails China, Japan, a nd Korea,

largely due to high costs. Sin gapore is the sole exception.

Growing the digital ec onomy depend on ve key

priorities: (1) Internet connectivity must be un iver-

sal and aordable. (2) e business clim ate must

encourage competition, which spurs innovation.

(3) Education systems must adapt workers’ skills

to new demands for a digital f uture. (4) Stronger

safety nets a re needed to protect those displaced

by automation. (5) ASEAN nations should seek

to improve nancial inclusion through te chnology

and adapt their regulator y frameworks to manage

the risks associated with ntech.

As a regional bloc, ASE AN is the fth largest

economy in the world, and with hundreds of mil-

lions of young people eager to join the digital re v-

olution, there’s no better time to close the digital

divide. e future of the region depends on it.

Prepared by JIA FENG, communications of‌f‌icer, IMF

Communications Department

Poised to become digital-f‌irst economies, ASEAN countries still face core challenges

ON THE CUSP

United States

China

Japan

Germany

ASEAN

United Kingdom

China

India

ASEAN

United States

Brazil

19.4

12.0

4.9

3.7

2.8

2.6

1,390

1,317

643

326

208

(trillions of US dollars) (millions of people)

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