Asean riding the e-commerce wave - ERIA: Economic Research ... · 6/27/2017  · of e-commerce, but...

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Opinion 14 WWW.PHNOMPENHPOST.COM JUNE 27, 2017 THE PHNOM PENH POST EDITORIAL PERSONNEL Publisher Bill Clough Acting Editor-in-Chief Stuart White Editor-in-Chief Post Khmer Kay Kimsong Managing Editor Post Khmer Sam Rith Chief of Staff Chhay Channyda Deputy Chief of Staff Phak Seangly Features Editor James Reddick Business Editor Cam McGrath Deputy Business Editor Sorn Sarath Senior National Reporter Shaun Turton Sports Editor Joe Curtin Picture Editor Sahiba Chawdhary World Editor Sam Wheeler Deputy Head of Lifestyle Desk Pan Simala Chief Sub-Editor Michael Philips Sub-Editors Yesenia Amaro, Ananth Baliga, Martin de Bourmont, Matthieu De Gaudemar, Erin Handley, Leonie Kijewski, Kali Kotoski, Tyler Lebens, Andrew Nachemson, Alessandro Marazzi Sassoon Reporters Khouth Sophak Chakrya, Niem Chheng, Mech Dara, Vandy Muong, Kim Sarom, Meas Sokchea, Touch Sokha, Cheng Sokhorng, Kong Meta, Soth Koemsoeun, Sineat Yon, Rinith Taing Photographers Heng Chivoan, Pha Lina, Hong Menea, Sreng Meng Srun Digital Director Julia Stoklasa Web Editor Leang Phannara, Jenni Reid Webmasters Uong Ratana, Horng Pengly, Sous Chanthy, Pang Vichea SIEM REAP BUREAU Office Manager Thik Skaline Distribution Manager Seng Sech PRODUCTION & PRINTING Head of Desktop Publishing Nhim Sokphyrak Desktop Publishing Suon Savatdy, Chum Sokunthy, Danh Borath Tep Thoeun Thyda, Ney Chan Borin, Sokthyda HEAD OFFICE Post Media Co, Ltd. 888, Building H, 8th floor, Phnom Penh Center, Cnr Sothearos & Sihanouk Blvd, Chamkarmon, Phnom Penh, Cambodia Tel: 023 214 311, 0214 311-017 Fax: 023 214 318 SIEM REAP No 629, Street 6 Dangkum Commune Tel: 063 966 290, Fax: 063 966 590 EXECUTIVES Chief Executive Officer Alex Odom COMMERCIAL DEPARTMENT National Sales Manager Chap Narith Account Director Tin Rosaly Post English Sales Manager Toun Chanreaksmey PR Manager Chhim Sreyneang CIRCULATION & DISTRIBUTION Marketing & Circulation Manager Prach Monnyreak Distribution Manager Meas Thy ADMINISTRATION www.phnompenhpost.com W ITH the emer- gence of the digital economy driving eco- nomic growth and creating new business opportunities around the world, how can the Asean nations catch this wave and ride it? What obsta- cles do they need to overcome to participate fully in regional and global e-commerce? Over the past decade, there has been a global boom in e-commerce, driv- en by rapidly expanding middle classes, increasing internet penetration, and the widespread adoption of smartphones around the world. With the dramatic success of giant e-commerce businesses such as Amazon and Alibaba, many other businesses around the world are poised to capitalise on these new opportunities. The United Nations Confer- ence on Trade and Develop- ment estimates that in 2015, the total global value of e-commerce transactions stood at around $22 trillion, with this expected to grow at the compound rate of 19.42 percent in the period from 2016 to 2020, projected to amount to more than $44 tril- lion in 2020. While the US has dominat- ed the e-commerce sector since its inception, China is one of the few Asian nations to have a strong presence, with both the establishment of strong e-commerce plat- forms and their widespread acceptance by consumers. Other markets, including those in the 10 Southeast Asian nations, still remain rel- atively undeveloped. With more than 600 million people living in this region, approximately 8.8 percent of the world’s population, and more than half of the popula- tion are under the age of 30, this region holds massive potential. According to a joint study by Google and Temasek Holdings Pte, there will be a 16-fold increase – slightly lower than the afore- mentioned global projection – in the value of e-commerce transactions in Southeast Asia by 2025. While the potential is evi- dently enormous, a number of constraints currently impact the region’s ability to reap all the benefits, includ- ing the availability and relia- bility of internet connections and of logistics services; the existence and effective implementation of appropri- ate legal frameworks; and the availability of the necessary human capital. At the preliminary stages, participation in e-commerce may require little more than intermittent access to the internet through mobile devices such as smartphones, and perhaps a desktop or a laptop. However, more advanced development requires an internet infra- structure sufficient to enable full participation in cross- border markets at regional and global levels. A recent World Bank devel- opment report emphasised the importance of the “mid- dle mile” which requires lib- eralising markets to build and operate backbone net- works and encouraging open access. The development of these networks is contingent on other infrastructure, including roads, railways, and energy distribution, which will facilitate the development of optical fibre links, internet exchange points, and local caches. Similarly, the provision of reliable and efficient logistics services is dependent on the quality of roads and port infrastructure which deter- mines the extent to which web-based and other e-com- merce services can penetrate particular countries or regions, including the most remote regions. In these areas, almost all Asean countries need to make significant improve- ments, as indicated by their relatively low ranking in per- formance indices such as the Logistics Performance Index and the Global Competitive- ness Index. To address these weaknesses, the provision of sustainable public funding is crucial to enable most Asean nations to address infra- structure deficits without recourse to public-private partnership schemes. In addition, policy and regulatory frameworks need to be strengthened to pro- vide strong legal founda- tions for the development of the e-commerce sector. While a number of Asean nations have made signifi- cant efforts to develop these frameworks, the quality of implementation varies wide- ly. In particular, stronger emphasis needs to be placed on addressing cybercrime. It should be emphasised that these frameworks must be flexible and open to revi- sion in response to ongoing developments. Given the rap- id evolution of the sector, it is extremely likely that there will be an ongoing need for poli- cymakers to address the impact of new innovations as they develop. For example, the Indonesian government has been chal- lenged by the sudden emer- gence and extremely rapid growth of Go-Jek, which was initially launched as an online application-based motorbike taxi service but rapidly morphed into a provider of a range of other services. The emergence of Go-Jek met with opposition from conventional taxi businesses, who felt that the largely unreg- ulated nature of this new serv- ice placed them at a distinct competitive disadvantage. While the Indonesian govern- ment has made steps towards imposing price controls and fleet restrictions, these meas- ures appear to be ad hoc, short-term measures that have proved to be largely inef- fective. This case emphasises the need for the government to adopt comprehensive, adaptive solutions that pro- vide incentives for entrepre- neurs to innovate while at the same time providing a suffi- cient degree of regulation. In particular, with the ability of e-commerce to facilitate transactions across borders, it is vital to harmonise regula- tions between countries to catalyse further development of e-commerce in the region. This could be achieved by uti- lising a number of instru- ments developed by Asean, such as the Asean Economic Community 2025 Blueprint and the Asean ICT Master plan 2020. Finally, the growth of e-commerce is dependent on Asean’s human capital, which can only be strengthened through the provision of appropriate education. Improving the quality of edu- cation may require substan- tial changes to the education- al system, including reforming the curricula and the management of the sec- tor, together with measures to upgrade the performance of teachers, educators, research- ers and academicians. In par- ticular, greater emphasis should be placed on voca- tional education. For Asean to reap the full benefits of the rise of digital technology, all of its member nations, separately and joint- ly, must strive to make improvements in all these four areas. They must see this as an opportunity to adapt, evolve, reform and innovate not only to reap the benefits of e-commerce, but to lay the foundations for sustainable development more generally into the future. Asean riding the e-commerce wave A motorcycle taxi driver displays the popular motorbike-hailing app by Indonesian start-up Go-Jek on his mobile phone in Jakarta. ADEK BERRY/AFP Opinion Yuanita Suhud Cynical ploy or progress on gay rights? Yuanita Suhud is a research associate with the Economic Research Institute for Asean and East Asia. The views expressed here are personal and do not reflect ERIA’s position.

Transcript of Asean riding the e-commerce wave - ERIA: Economic Research ... · 6/27/2017  · of e-commerce, but...

Page 1: Asean riding the e-commerce wave - ERIA: Economic Research ... · 6/27/2017  · of e-commerce, but to lay the foundations for sustainable development more generally into the future.

Opinion14 www.phnOmpenhpOst.cOm june 27, 2017 the phnOm penh pOst

editorial personnel

PublisherBill Clough Acting Editor-in-Chief Stuart WhiteEditor-in-Chief Post KhmerKay KimsongManaging Editor Post KhmerSam RithChief of StaffChhay ChannydaDeputy Chief of StaffPhak SeanglyFeatures Editor James ReddickBusiness EditorCam McGrathDeputy Business Editor Sorn SarathSenior National Reporter Shaun TurtonSports EditorJoe CurtinPicture EditorSahiba ChawdharyWorld EditorSam WheelerDeputy Head of Lifestyle DeskPan SimalaChief Sub-EditorMichael PhilipsSub-EditorsYesenia Amaro, Ananth Baliga, Martin de Bourmont, Matthieu De Gaudemar, Erin Handley, Leonie Kijewski, Kali Kotoski, Tyler Lebens, Andrew Nachemson, Alessandro Marazzi Sassoon ReportersKhouth Sophak Chakrya, Niem Chheng, Mech Dara, Vandy Muong, Kim Sarom, Meas Sokchea, Touch Sokha, Cheng Sokhorng, Kong Meta, Soth Koemsoeun, Sineat Yon, Rinith TaingPhotographersHeng Chivoan, Pha Lina, Hong Menea, Sreng Meng Srun Digital DirectorJulia Stoklasa Web EditorLeang Phannara, Jenni ReidWebmastersUong Ratana, Horng Pengly, Sous Chanthy, Pang Vichea

siem reap bureau

Office ManagerThik Skaline Distribution Manager Seng Sech

production & printing

Head of Desktop PublishingNhim SokphyrakDesktop PublishingSuon Savatdy, Chum Sokunthy, Danh BorathTep Thoeun Thyda, Ney Chan Borin, Sokthyda

head office

Post Media Co, Ltd. 888, Building H, 8th floor,Phnom Penh Center,Cnr Sothearos & Sihanouk Blvd,Chamkarmon, Phnom Penh, CambodiaTel: 023 214 311, 0214 311-017 Fax: 023 214 318

siem reap

No 629, Street 6 Dangkum CommuneTel: 063 966 290, Fax: 063 966 590

executives

Chief Executive OfficerAlex Odom

commercial department

National Sales ManagerChap NarithAccount DirectorTin RosalyPost English Sales ManagerToun ChanreaksmeyPR Manager Chhim Sreyneang

circulation & distribution

Marketing & Circulation ManagerPrach Monnyreak Distribution ManagerMeas Thy

administration

Admin HR ManagerPich SocheatHR Executive Neang SopheapAssistants to Admin HR ManagerLay SopanhaFinancial DirectorHeang TangmengChief AccountantSren VichekaTreasurersSok Sophorn, Yon Sovannara, Cheam Sopheak

IT Manager Seng Nak, Vong Oun

TO CONTACT [email protected] [email protected] [email protected]@phnompenhpost.comwww.phnompenhpost.com© Post Media Co, LtdThe Phnom Penh Post is wholly owned and printed by Post Media Co Ltd. The title The Phnom Penh Post in either English or Khmer languages, its associated logos or devices and the contents of this publication may not be reproduced in whole or in part without the written consent of Post Media Co Ltd.

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Serbia hardly has a progressive track record on gay rights. So when Presi-dent alexander Vucic announced this month that he was nominating ana brnabic, a 41-year-old lesbian as prime minister, he stunned Serbians and outside observers alike.

brnabic – who entered politics only last year when Vucic named her a minister of public administration and local government – would secure a double first for Serbia, which has nev-er been led by a woman or by some-one who is openly gay. The nomina-tion also plays to the canny Vucic’s political ambitions.

in fact, there is every reason to sus-pect that the choice of brnabic is a

decoy move. Vucic may be trying to calm european concerns as Serbia moves toward membership in the european union, while he continues to cosy up to russia and beef up Ser-bia’s military.

at the same time, a failure by Ser-bia’s parliament to approve brnabic’s nomination would trigger an early election. it would be Serbia’s third in five years, and with each election, Vucic has increased his power. When he resigned in March as prime min-ister to run for the largely ceremoni-al office of president, there were deep suspicions that he intended to shift the centre of power to the pres-idency and install a puppet as prime

minister. His victory on april 2 led to huge street protests in Serbia’s capi-tal, belgrade.

The nomination will have the back-ing of 100 members of Parliament who are in Vucic’s Serbian Progres-sive Party, but 26 more votes are needed to secure a majority. Opposi-tion lawmakers, in a country where about half the people believe homo-sexuality is an illness, are balking at approving a lesbian.

Some pro-russian politicians are portraying her nomination as part of a degenerate Western plot. The chief of the united Serbia party, Dragan Markovic Palma, has objected vehe-mently, declaring, “ana brnabic is

not my prime minister.” a vote scheduled for this week has been delayed.

after she was nominated, brnabic said: “if elected in parliament, i will run the government with dedication and responsibility.” indeed, if brn-abic were allowed to exercise the rightful powers of her office and run Serbia’s government, it would send a powerful signal that it is time for Ser-bia – and the rest of the world – to move beyond old prejudices. but that goal will be compromised if brnabic is approved only to become the tool of an autocrat, or discarded to further Vucic’s sweeping ambitions. THE NEW

YORK TiMES

WiTH the emer-gence of the digital economy driving eco-

nomic growth and creating new business opportunities around the world, how can the asean nations catch this wave and ride it? What obsta-cles do they need to overcome to participate fully in regional and global e-commerce?

Over the past decade, there has been a global boom in e-commerce, driv-en by rapidly expanding middle classes, increasing internet penetration, and the widespread adoption of smartphones around the world. With the dramatic success of giant e-commerce businesses such as amazon and alibaba, many other businesses around the world are poised to capitalise on these new opportunities.

The united nations Confer-ence on Trade and Develop-ment estimates that in 2015, the total global value of e-commerce transactions stood at around $22 trillion, with this expected to grow at the compound rate of 19.42 percent in the period from 2016 to 2020, projected to amount to more than $44 tril-lion in 2020.

While the uS has dominat-ed the e-commerce sector since its inception, China is one of the few asian nations to have a strong presence, with both the establishment of strong e-commerce plat-forms and their widespread acceptance by consumers. Other markets, including those in the 10 Southeast asian nations, still remain rel-atively undeveloped.

With more than 600 million people living in this region, approximately 8.8 percent of the world’s population, and more than half of the popula-tion are under the age of 30, this region holds massive potential. according to a joint study by Google and Temasek Holdings Pte, there will be a 16-fold increase –

slightly lower than the afore-mentioned global projection – in the value of e-commerce transactions in Southeast asia by 2025.

While the potential is evi-dently enormous, a number of constraints currently impact the region’s ability to reap all the benefits, includ-ing the availability and relia-bility of internet connections and of logistics services; the existence and effective implementation of appropri-ate legal frameworks; and the availability of the necessary human capital.

at the preliminary stages, participation in e-commerce may require little more than intermittent access to the internet through mobile devices such as smartphones, and perhaps a desktop or a laptop. However, more advanced development requires an internet infra-structure sufficient to enable full participation in cross-border markets at regional and global levels.

a recent World bank devel-opment report emphasised the importance of the “mid-dle mile” which requires lib-eralising markets to build and operate backbone net-works and encouraging open

access. The development of these networks is contingent on other infrastructure, including roads, railways, and energy distribution, which will facilitate the development of optical fibre links, internet exchange points, and local caches.

Similarly, the provision of reliable and efficient logistics services is dependent on the quality of roads and port infrastructure which deter-mines the extent to which web-based and other e-com-merce services can penetrate particular countries or regions, including the most remote regions.

in these areas, almost all asean countries need to make significant improve-ments, as indicated by their relatively low ranking in per-formance indices such as the Logistics Performance index and the Global Competitive-ness index. To address these weaknesses, the provision of sustainable public funding is crucial to enable most asean nations to address infra-structure deficits without recourse to public-private partnership schemes.

in addition, policy and regulatory frameworks need to be strengthened to pro-

vide strong legal founda-tions for the development of the e-commerce sector. While a number of asean nations have made signifi-cant efforts to develop these frameworks, the quality of implementation varies wide-ly. in particular, stronger emphasis needs to be placed on addressing cybercrime.

it should be emphasised that these frameworks must be flexible and open to revi-sion in response to ongoing developments. Given the rap-id evolution of the sector, it is extremely likely that there will be an ongoing need for poli-cymakers to address the impact of new innovations as they develop.

For example, the indonesian government has been chal-lenged by the sudden emer-gence and extremely rapid growth of Go-jek, which was initially launched as an online application-based motorbike taxi service but rapidly morphed into a provider of a range of other services.

The emergence of Go-jek met with opposition from conventional taxi businesses, who felt that the largely unreg-ulated nature of this new serv-ice placed them at a distinct competitive disadvantage.

While the indonesian govern-ment has made steps towards imposing price controls and fleet restrictions, these meas-ures appear to be ad hoc, short-term measures that have proved to be largely inef-fective. This case emphasises the need for the government to adopt comprehensive, adaptive solutions that pro-vide incentives for entrepre-neurs to innovate while at the same time providing a suffi-cient degree of regulation. in particular, with the ability of e-commerce to facilitate transactions across borders, it is vital to harmonise regula-tions between countries to catalyse further development of e-commerce in the region. This could be achieved by uti-lising a number of instru-ments developed by asean, such as the asean economic Community 2025 blueprint and the asean iCT Master plan 2020.

Finally, the growth of e-commerce is dependent on asean’s human capital, which can only be strengthened through the provision of appropriate education. improving the quality of edu-cation may require substan-tial changes to the education-al system, including reforming the curricula and the management of the sec-tor, together with measures to upgrade the performance of teachers, educators, research-ers and academicians. in par-ticular, greater emphasis should be placed on voca-tional education.

For asean to reap the full benefits of the rise of digital technology, all of its member nations, separately and joint-ly, must strive to make improvements in all these four areas. They must see this as an opportunity to adapt, evolve, reform and innovate not only to reap the benefits of e-commerce, but to lay the foundations for sustainable development more generally into the future.

Asean riding the e-commerce wave

A motorcycle taxi driver displays the popular motorbike-hailing app by Indonesian start-up Go-Jek on his mobile phone in Jakarta. ADEK BERRY/AfP

OpinionYuanita Suhud

Cynical ploy or progress on gay rights?

Yuanita suhud is a research associate with the economic research institute for asean and east asia. the views expressed here are personal and do not reflect eria’s position.