SYDNEY: Prime Minister Lee Hsien Loong welcomed a new ASEAN-Australia Digital Standards Cooperation Initiative on Friday (Mar 16), calling it a “very good first step in developing inter-operable digital standards”.
He said that this will facilitate trade and reduce costs for businesses across ASEAN and Australia, particularly for small and medium-sized enterprises (SMEs).
The initiative was announced by Australian Prime Minister Malcolm Turnbull at a conference for SMEs on the sidelines of the first ASEAN-Australia Special Summit.
The new initiative is in line with an agreement on e-Commerce that ASEAN is pursuing, which will streamline the different regulatory systems across the 10-member countries and make electronic transactions easier and safer.
Speaking as ASEAN Chair, Mr Lee zoomed in on the growth of digital economy in ASEAN, citing ride-hailing giants Grab and Go-Jek which are based in Singapore and Indonesia respectively, as examples of startups which had attracted a record US$8 billion from investors last year.
Southeast Asia is also the backdrop of a “vibrant scene of innovative startups, venture capital platforms, and business opportunities”, said Mr Lee.
“It’s still in its infancy, but it is rapidly becoming bigger,” he added.
At the conference, Mr Lee underscored the importance of SMEs, which he called engines of growth - particularly in developing regions like ASEAN.
SMEs comprise up to half of ASEAN members’ GDP, and a source of at least half of total employment in the region.
Mr Lee said: “But more importantly, SMEs are engines of innovation. They embody the spirit of enterprise. Many begin life as startups, before scaling up into market leaders.
"Successful SMEs often venture overseas, braving new challenges in search of fresh markets and opportunities."
LOCAL, REGIONAL EFFORTS TO HELP SMEs GROW
Mr Lee added that this is why many governments are committed to helping SMEs grow.
Singapore, he cited, has grant schemes and programmes to boost productivity and capabilities. It has also set up nine “Singapore Centres” in major cities around the world to help local SMEs set up their businesses overseas.
"On a regional level, ASEAN is currently implementing a 10-year strategic action plan to develop SMEs," said Mr Lee. "Initiatives include an online academy which offers business training courses and a mentorship network.
"ASEAN also has tremendous potential - as a large and growing single market of more than 600 million people, it is set to be the fourth-largest in the world by 2030."
More than 60 per cent of its population are also under the age of 35, which means a steady workforce and a growing consumer market. On top of that, the regional grouping’s annual consumer spending is forecast to hit US$2.3 trillion by 2020.
To provide a good environment for businesses to thrive, entry barriers and transaction costs have been lowered since the formation of the ASEAN Economic Community in 2015.
The bloc also inked a free trade agreement with Australia and New Zealand (AANZFTA), which Mr Lee described as “ASEAN’s most progressive free trade agreement”.
“ASEAN continues to work towards regional economic integration. The global mood may be moving in the opposite direction, but within ASEAN and Southeast Asia, we’re trying our best to strive forward to deepen integration, to deepen interdependence, to work together, to trade, to open up markets, to co-prosper together,” said Mr Lee.
“These initiatives are important to businesses seeking to enter or grow their presence in ASEAN markets and beyond."
Mr Lee said these are reasons why it “makes sense” for ASEAN SMEs to thrive and prosper beyond the region, including to Australia, and for Australian SMEs to set up their business in ASEAN.
“I’m confident that SMEs have a promising outlook in Australia, as in ASEAN, and the combined efforts of businesses, industries, governments and partners will allow us to seize the growing opportunities in our region, and make this a productive, prosperous and a successful environment for businesses and for our people,” Mr Lee added.