Southeast Asia’s internet needs a light touch
Southeast Asia has made positive strides recently in supporting the development of the region’s fast-growing internet economy with effective regulation.
But despite a lot of helpful political rhetoric, the legislative landscape tells a contradictory story. The region needs to move quickly to create a common digital economy and avoid divisive national rules.
The Association of Southeast Asian Nations last year made digital regulation a clear focus, especially the promotion of economic integration and digital connectivity.
With Singapore in the chair, ASEAN passed key milestones in 2018, including the ASEAN information and communications technology masterplan, frameworks on digital integration, cybersecurity, and smart cities, an e-commerce agreement and a joint declaration to minimize the harmful effect of fake news.
At the International Monetary Fund-World Bank annual meeting in Bali in October, Indonesian president of Jokowi Widodo spoke of the importance of putting innovation before regulation. In words that were very welcome to the industry, he said: “We should allow innovation and experimentation to flourish first and provide safe harbor to those inventors and entrepreneurs who are bringing new tools to society.”
At the ASEAN World Economic Forum in Hanoi, Vietnam’s prime minister Nguyen Xuan Phuc was equally supportive. He stated that ground rules need to be established for an ASEAN data sharing operation and standardization for effective sharing and use of data.
But, on the ground, the regulatory developments have sometimes been less positive than the pledges, not least in Vietnam. The country’s Law on Cybersecurity, which came into effect on Jan 1, raises serious concerns over content control, data localization, and privacy. Long-expected amendments to Indonesia’s data localization law, detailing its implementation, have stalled amid concerns over ambiguous provisions and the lack of implementation guidelines.
In Thailand, the Cybersecurity Bill was proposed in response to the worldwide breach by the WannaCry ransomware. Though well-intentioned in attempting to protect the country against similar cyberattacks, the proposed law ran into significant public criticism for overextending state powers and creating the ground for potential privacy violations.
This is a landmark year for Thailand, which will be conducting a general election, as well as chairing the ASEAN in succession to Singapore. Bangkok’s leadership will be crucial in ensuring well-informed policies are developed to support the growth of ASEAN’s digital economy.
On the home front, Thailand should be commended for advancing a host of new laws in 2018 as part of its Digital Thailand transformation, including legislation for data protection, electronic transactions and digital IDs.
Thai Prime Minister Prayuth Chan-ocha has vowed to prioritize greater ASEAN connectivity to strengthen business. He has also highlighted Thailand’s efforts to ease regulatory processes, recognizing that such barriers would impede the Thailand 4.0 policy, which includes encouraging big data and intelligent systems.
Thailand has declared that balancing the needs of e-commerce with internet governance requirements like cybersecurity and privacy, will be Bangkok’s focus for ASEAN this year.
The region is at the doorstep of the Fourth Industrial Revolution. Long-term economic opportunities should not be derailed by a shortsighted rush to regulate. Thailand must lead member states in re-examining their approach to governing the internet and pursue smart regulation designed to encourage growth and development.
Data is the backbone of the digital economy, critical to all economic sectors, both public and private, and businesses big and small. Cross-border data access, usage, and exchange are essential to economic growth in the digital age.
Restrictions on cross-border data flows harm not only the competitiveness of the country implementing such policies, but also those at the receiving end of the data flow. If a neighboring country enacted similar provisions as Vietnam’s Law on Cybersecurity, it is unlikely a Vietnamese software startup could afford data storage facilities and local offices in multiple locations outside Vietnam — in effect curbing regional or global expansion plans.
This matters more in Southeast Asia, with its multiple jurisdictions that in large single countries such as the U.S., China or Japan.
As Ravi Menon, Managing Director of the Monetary Authority of Singapore has argued, “We need more data connectivity, and less data localization. Data localization measures are on the rise around the world and this is a serious risk.”
A recent report by Thammasat University in Thailand and the Asia Internet Coalition found that so-called ‘over the-tops’ (OTTs) — companies which provide media streaming direct to mobile devices — already contribute as much as 36 billion baht ($1.1 billion) and 30,000 jobs to Thailand’s economy, even at this early stage of digital adoption.
ASEAN members should support OTT services, acknowledging their role in creating economic and social value for startups and small and medium-size enterprises.
Laws can take years to draft and are difficult to roll back. Technology evolves far too quickly for the legislative process to catch up. The hardest hit from poorly considered laws and regulations will be the startups and SMEs who lack dedicated resources to navigate the regulatory landscape.
Getting regulation right requires all to play their part. As tech companies work to improve their platforms and services and protect users’ privacy and security, they must also support greater digital literacy, and ensure they are accountable to those they serve.
Tech companies should also back open industry dialogue, to try to ensure the interests of all are balanced and that barriers to growth are not created. Such conversations are far more beneficial if held early, before legislation is drafted. If diverse views are taken into account, the legislative output will be clear, consistent and to some extent, future-proofed against technological advancements. The region now has the chance to get back on a path toward smart regulation.
Thailand is in a unique position to take the lead in digital policy creation. Instead of regulating for the sake of it, it can chart a path for ASEAN digital policy that places the internet and technology in a position to benefit every sector of the economy and society.