Singapore and UN to Promote ASEAN Financial Inclusion

Image of stocks online. Htet Tayza discusses Fintech in Asia.

Singapore has the most developed finance sector, especially in the area of financial technology (fintech), of all the Association of South-East Asian Nation (ASEAN) territories. The city-state is, therefore, well-placed to promote sorely-needed financial inclusion across the region, which its central bank, the Monetary Authority of Singapore (MAS), has just teamed up with the UN to do.

Continue reading…

The Future Still Looks Bright For ASEAN Economic Community

ASEAN flags. Htet Tayza discusses the ASEAN economy. Image by Prachatal

The Association of South-East Asian Nations (ASEAN) is moving ever-closer to economic integration, in order to compete with the economic powerhouses of the world, like the EU and the US. Last year, the bloc formed the ASEAN Economic Community (AEC), to help achieve this goal. On the eve of its one year anniversary, experts said that despite a rocky start, the future still looks bright for the AEC. Continue reading…

Mobile Usage Fuels Card Fraud In ASEAN

A smartphone in use. Htet Tayza discusses card fraud in the ASEAN region.

Data suggests that half of the Association of South-East Asian Nations’ (ASEAN) population remains unbanked. But global and local are now developing innovative financial technologies (fintech) which allow unbanked ASEAN citizens to access to vital financial services via smartphone. One downside of this trend, reports suggest, is that it is fuelling card fraud in ASEAN member states. Continue reading…

Embracing Connectivity Could Benefit ASEAN SMEs

ASEAN flags. Htet Tayza discusses the ASEAN economy. Image by Prachatal

Singaporean Trade and Industry Minister S. Iswaran delivered a powerful speech at the recently held 9th ASEAN (Association of South East Asian Nations) & Asia Forum. During this speech, he advised small to medium-sized enterprises (SMEs) in the region to “embrace connectivity in order to thrive.”

Aiding SME growth 

Reporting on this story, regional news source Channel Street Asia notes that ASEAN is one of the world’s fastest-growing areas for internet adoption. At the forum, which was organised by the Singapore Institute of International Affairs think tank, Iswaran argued that increased digitalisation could allow ASEAN-based firms to access new growth opportunities.

He argued that ASEAN needs to boost its efforts to construct an integrated digital economy. Naming the benefits of this strategy, he said that it could allow regional SMEs to tap into foreign markets, without maintaining a physical presence in these countries. An integrated ASEAN digital economy, Iswaran added, could also make it easier for the bloc’s SMEs to compete with larger firms.

Recommended action plan 

Commenting further, Iswaran argued: “The digital economy offers a new degree of freedom and a new wave of opportunity for our businesses and our people. It can also be a modality for ASEAN’s economic engagement with its partners through the Regional Comprehensive Economic Partnership and other initiatives, at a broader regional level and also at a sectoral and company level.”

Iswaran issued a set of suggestions for Singapore’s Committee on the Future Economy, which along with Finance Minister Heng Swee Keat, he co-chairs. Iswaran advised the Committee to enhance ASEAN connectivity and develop its key digital capabilities. Iswaran admitted that ASEAN countries will have to tackle a number of issues before, fully benefiting from digitalisation. These problems included reforming ASEANs approach to trade facilitation and governing cross-border flows of data.

Tapping into potential  

Another panellist, UOB Managing Director Ian Wong, talked about ASEAN’s economic potential, saying: “If ASEAN were a country, it would be one where more than 50% of its 600 million population are under 30 years old. This is a very sustainable workforce for many companies for years to come.

“Additionally, it is estimated that 65% of ASEAN’s population will be in the middle-income class by 2030, presenting a huge consumption market for companies to tap into. By 2050, UOB estimates show that ASEAN could become the world’s fourth-largest economy.” The Malaysian Second Minister of International Trade recently estimated that ASEAN could hit this milestone by 2030.

Capitalising on opportunities 

Channel News Asia notes that logistics firm Ascent Solutions has already developed a digital strategy, in order to tap into ASEAN’s economic potential. Commenting on the new opportunities to be found in the region, Ascent Solutions’ CEO, Lim Chee Kean, said: “The AEC (ASEAN Economic Community) is going to help us with the deployment of our workers and engineers and I’m hoping through the AEC, it will also help to facilitate the winning of more Government projects.

“We are into the Internet of Things and cargo security; we put sensors on cargo and we track things that move. Especially in the area of cargo security, the emerging market will be our current focus. Because in this market, they need solutions. And they will embrace technology to help them with taking care of security.” The AEC has developed a zone to reduce tariffs between member nations.

But the Chairman of the Singapore Institute of International Affairs, Associate Professor Simon Tay, argued that ASEAN needs to bring its regulation in line with new innovations. Expanding, Tay said: “Clearly it’s behind the border issues, standardisation, but also the physical connectivity. If you bring the tariffs down but the cost of logistics in ASEAN is too high – even sometimes within a country like Indonesia or a large country – you need to bring this down so you can become globally competitive.”

Htet Tayza’s commentary 

SMEs are the backbone of the ASEAN economy. Official data indicates that SMES comprise between 88.8% and 99.9% of businesses in ASEAN member states, meaning that they are vital to economic growth. By introducing measures such as the recently announced online academy for ASEAN SMEs, it is clear that the bloc is committed to providing these firms with the tools they need to develop operations, increase profit margins and ultimately, spur economic progress.

It is clear, however, that ASEAN member states must also help their SMEs tap into the region’s major digital potential, so they can compete against larger firms in this increasingly-connected world. By pursing this strategy, ASEAN member states could make it easier for SMEs to handle everything from acquiring funding to hiring staff, allowing them to streamline operating costs. But experts showed at this Forum that there are a number of issues ASEAN territories must confront and resolve, before the bloc fosters the connectivity rates needed to support its SMEs going forward.

Htet Tayza.