Innovation core of Asean's next phase of development: Tharman

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Fintech, e-commerce to be developed as economic balance shifts to region: DPM

Innovation will be at the heart of Asean's next phase of development, Deputy Prime Minister Tharman Shanmugaratnam said on Wednesday, as he outlined areas of priority, including fintech and e-commerce, for the regional grouping.

He was delivering the opening remarks on the strategic outlook for Asean, which Singapore chairs this year, at a session at the World Economic Forum in Davos, Switzerland.

Mr Tharman told an audience of business and political leaders that despite challenges such as a shifting geostrategic balance, uncertainties over trade, cyber security and terrorism, there are huge opportunities for Asean.

"The shift in economic balance globally is playing to Asean's favour," he said. "The rise of China and India is a huge opportunity for Asean, and in particular the Belt and Road Initiative has Asean as a core part of that initiative - I would say an anchor along the initiative."

Home to about 639 million people, Asean is the world's seventh largest economy and is projected to become the fifth largest by 2020.

Singapore assumed the rotating chairmanship of Asean this month, and Mr Tharman said its main emphasis will be to build resilience to cyber-security threats and terrorism and push the innovation agenda.


While Asean is still a major commodity exporter, with highly competitive export manufacturing, and an attractive market for goods and services, innovation is now "being breathed into all the existing dimensions of economic activities", he said.

Areas that could be developed include the use of financial technology, e-commerce, developing smart cities and getting youth interested in innovation, Mr Tharman added.

The use of fintech has huge potential as Asean is a diverse region with "large under-served populations without banking accounts", and Mr Tharman talked about a goal to link digital payment systems across Asean, pointing out that experiments are under way.

For e-commerce, the goal is to develop trade rules to lower costs for consumers and improve access for businesses.

Asean also intends to designate smart cities across the region, and will work with the private sector to develop them.

Finally, Mr Tharman pointed out that these efforts will not be executed by just "sagely experts or high-level government people - youth will also have a part to play".

"Developing a workforce that is very comfortable with innovation, that feels innovation gives them advantage, is going to be critical," he said.

Mr Tharman's remarks were followed by a panel discussion on the topic. Panellists included Vietnam's Deputy Prime Minister Vuong Dinh Hue and CIMB Group Holdings chairman Nazir Razak.