The Asean region has benefited from growing cooperation but building an integrated digital economy could generate even more payoffs, said the Minister for Trade and Industry (Industry) yesterday.
Mr S. Iswaran told a forum at the Ritz Carlton Millenia that greater integration was even more important in a time when "we see increasing scepticism about the value of keeping economies open and integrated".
While he acknowledged that there are genuine concerns among people who might feel they have been harmed by an open economy, he said that these views must not seize the policy agenda as it would be detrimental to the long-term interests of countries.
He cited Asean's increasing economic integration and the opportunities this created as the catalyst for the region's promising outlook, even as the global economy remains "soft".
Asean is expected to grow an average of 5.2 per cent a year between this year and 2020, outpacing global growth of about 3 per cent for the next few years.
"In the next phase of economic development, Asean must embrace digital connectivity so that we can thrive in the future economy," Mr Iswaran said.
"We are already the world's fastest-growing region in terms of Internet adoption, with 3.8 million new users coming online every month. If Asean governments support digital connectivity and Asean businesses keep pace with the shift towards digitisation, the payoffs will be significant."
Asean's digital economy could grow to US$200 billion (S$270 billion) by 2025, with e-commerce taking the lion's share of about US$88 billion, he added.
Small and medium-sized enterprises (SMEs) stand to gain from an integrated digital economy, he said, as they can reach out to a significantly larger consumer pool.
Mr Iswaran cited home-grown online travel platform BeMyGuest, which offers travel activities by more than 4,000 operators in Asean, many of which are small firms running activities like day tours and cooking classes.
He said that BeMyGuest had a tenfold growth in bookings after linking up with China's online travel giant Ctrip. It was listed as one of magazine Fast Company's top 50 most innovative companies, along with firms like Airbnb and Uber.
Mr Iswaran was speaking to about 300 corporate leaders from regional businesses, government officials and policymakers at the ninth annual Asean and Asia forum, organised by the Singapore Institute of International Affairs.
Indonesia's newly appointed Minister for National Development Planning, Professor Bambang Brodjonegoro, spoke of the need for domestic reforms.
"It is time to focus on the economic side and I think it's also the time to push for reform," he said, adding that Indonesian President Joko Widodo is trying to transform Indonesia's economy from consumption-led to investment-led growth.
Despite the generally positive outlook for the region, the uncertainty of the Trans-Pacific Partnership, which has taken five years of negotiation, loomed in the background. It could potentially be stymied by the United States presidential elections, as both candidates have said they are against it.
Mr Michael Michalak, regional managing director of the US-Asean Business Council, said that the Obama administration is determined "to do everything in its power to try and push TPP through the Congress", and there is a good chance it would be ratified.