Southeast Asia
Vietnam Promotes ASEAN’s Role in Resolving the South China Sea Dispute
The year 2022 marks the 40th anniversary of the adoption of the United Nations Convention on the Law of the Sea (UNCLOS). Vietnam was one of 117 countries signed the Convention on the first day. As a coastal state, Vietnam considers UNCLOS as an important legal document because it provides a comprehensive legal framework for ocean governance, and clearly sets out the limits on the territorial sea, contiguous zone, Exclusive Economic Zone (EEZ) and continental shelf. However, due to the fact that UNCLOS does not address disputes among states over sovereignty or disputes over maritime delimitation,[i] therefore protecting sovereignty and jurisdiction in the South China Sea (Vietnam calls the East Sea) through international court systems is less effective. Hence, one of Vietnam’s options to protect its sovereignty, sovereign rights and jurisdiction in the South China Sea is to internationalize the dispute through the Association of Southeast Asian Nations (ASEAN). After China used of force to invade the features managed by Vietnam in the Spratly Islands in 1988, ASEAN issued the Declaration on the South China Sea in 1992 which emphasizes the necessity to resolve all sovereignty and jurisdictional issues pertaining to the South China Sea by peaceful means, without resort to force, and urges all parties concerned to exercise restraint with the view to creating a positive climate for the eventual resolution of all disputes.
Since becoming a ASEAN member in 1995, Vietnam has actively worked with other countries in ASEAN to protect its sovereignty, sovereign rights and jurisdiction in the South China Sea. Firstly, Vietnam has made efforts to bring the South China Sea issue back in the Chairman Statements of the ASEAN Summits after a number of years the issue was “forgotten”. In fact, after ASEAN and China signed the Declaration on the Conduct of Parties in the East Sea (DOC) in 2002, the way of settling disputes in the South China Sea was not mentioned in the Chairman Statements of the Summits in some years later. Even in three ASEAN Summits of 2007, 2008, and 2009 respectively, the South China Sea issue was not mentioned in the Chairman’s statements. Most notably, the Chairman’s Statement of the 15th ASEAN Summit (October 2009) did not mention the South China Sea either, although before that China officially tabled its nine dash-line map to the UN Commission on the Limits of the Continental Shelf and claimed “historic rights” to a large part of the South China Sea which has been regarded as the prime source of tension in the South China Sea ever since.[ii] Faced with the challenge, as the rotation Chair of ASEAN in 2010, Vietnam actively persuaded and won the consensus of all member countries to include the South China Sea issue in the Chairman’s Statement of the Summit. The 2010 Hanoi Declaration emphasizes the principles of settling disputes through peaceful solutions, in accordance with widely recognized principles of international law including UNCLOS 1982 and relevant international laws. The statement also emphasizes the realization of the Code of Conduct (COC) in the South China Sea.
Secondly, Vietnam has actively built and proposed a common awareness among ASEAN member states on principles and methods of settling disputes in the South China Sea. The Singapore Declaration of the 4th ASEAN Summit in 1992 states that the workshops on the South China Sea held in Bali in 1990 and Bandung in 1991 were external and intra-ASEAN dialogues on ASEAN security cooperation. After China used force to occupy Mischief Reef in February 1995, the South China Sea issue was included in the Bangkok Summit Declaration released at the 5th ASEAN Summit held in December 1995, which emphasizes that “ASEAN shall seek an early, peaceful resolution of the South China Sea dispute and shall continue to explore ways and means to prevent conflict and enhance cooperation in the South China Sea consistent with the provisions of the TAC and the ASEAN Declaration on the South China Sea of 1992 as well as international law including the United Nations Convention on the Law of the Sea”. The Press Statement of the First Informal ASEAN Heads of Government Meeting mentioned of the South China Sea issue as the 1995 Bangkok Summit Declaration did. Unfortunately, the word “the South China Sea” did not appear in the Press Statement of the Second ASEAN Informal Meeting of Heads of State/Government of the Member States of ASEAN, held in Kuala Lumpur in December 1997. However, when Vietnam hosted the ASEAN Summit in 1998, there were new important points regarding the South China Sea issue. Instead of prioritizing a solution based on the TAC and ASEAN Declaration on the South China Sea in 1992, and international law was ranked last, the 1998 Hanoi Declaration underlines the importance of the international laws especially the 1982 UNLOCS by stating that “We shall promote efforts to settle disputes in the South China Sea by peaceful means in accordance with international law, including the 1982 United Nations Convention on the Law of the Sea, and in the spirit of the 1992 ASEAN Declaration on the South China Sea”. The Hanoi Declaration also called on all parties concerned to exercise restraint and to refrain from taking actions that are inimical to the peace, security and stability of Southeast Asia and the Asia-Pacific region. This spirit was further recognized in the 2010 ASEAN Chairman’s Statement when Vietnam assumed the ASEAN Chair. These principles and methods of maintain peace and stability in the South China Sea which was stated in the 1998 Hanoi Declaration have later become the core elements of the South China Sea issue in most of Chairman’s Statements of the subsequent ASEAN Summits.
Thirdly, Vietnam has been making efforts to unite ASEAN in the South China Sea issue. After ASEAN Foreign Ministers’ Statement on the Current Developments in the South China Sea released in Myanmar in May 2014 as a grouping’s response to China’s placing of an oil-rig in the EEZ and continent shelf of Vietnam, ASEAN’s collective spirit has been somewhat affected, at least through the bloc’s Chairman’s Statement of the summits. Although still expressing the mutual position of all member states of ASEAN, phrases such as “some leaders”, “some ministers” have appeared instead of “We” in joint communiqué of Foreign Minister Meetings and Chairman’s Statements of ASEAN Summits thereafter when mentioning of the South China Sea issue. This reflected the challenges of the bloc’s solidarity. The 48th ASEAN Foreign Minister’s Communiqué (2015) states that “We took note of the serious concerns expressed by some Ministers on the land reclamations in the South China Sea, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the South China Sea”. In the same year, Chairman’s Statement of the 27th ASEAN Summit when mentioning of the South China Sea issue states that “We shared the concerns expressed by some Leaders on the increased presence of military assets and the possibility of further militarization of outposts in the South China Sea”. The same situation continued in the Chairmanships of Laos (2016), the Philippines (2017), Singapore (2018), and Thailand (2019).
However, things were different under the Chairmanship of Vietnam in 2020. By the 36th and 37th ASEAN Summit held virtually, ASEAN member states reached high consensus when the term ‘we’ was completely used when the South China Sea issue is mentioned in the Chairman’s Statements. The 36th Chairman’s’ Statement writes: “We discussed the situation in the South China Sea, during which concerns were expressed on the land reclamations, recent developments, activities and serious incidents, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region”. Unfortunately, under Brunei Darussalam’s ASEAN Chairmanship in 2021, the term “by some ASEAN Member States” appeared again when the statement mentioned of the situation in the South China Sea.
Fourthly, since the Permanent Court of Arbitration (PCA) issued a ruling on the case between the Philippines and China on the South China Sea issue in 2016, ASEAN Chairman’s Statements from 2017 to 2019 still urged to resolve the South China Sea dispute by peaceful means, consistent with international law, including UNCLOS 1982, but for various reasons, the determination of the legal status of features, sovereign rights and jurisdiction of countries in the South China Sea had been completely absent. However, under the Chairmanship of Vietnam in 2020, ASEAN as a grouping “reaffirmed that the 1982 UNCLOS is the basis for determining maritime entitlements, sovereign rights, jurisdiction and legitimate interests over maritime zones, and the 1982 UNCLOS sets out the legal framework within which all activities in the oceans and seas must be carried out”. In other words, through the 36th ASEAN Chairman’s Statement, ASEAN as a grouping has indirectly supported the 2016 ruling of the PCA.
Last but not least, on the negotiation to build COC has encountered obstacles and difficulties because ASEAN countries for their own interests have different views on the code’s dispute settlement mechanism. By the 35th ASEAN Summit in Thailand (2019), ASEAN member states could only agree to build an effective and substantive COC. Only to the 36th ASEAN Summit, under the chair of Vietnam, ASEAN has made great progress in that since ASEAN member countries openly supported for the early conclusion of an effective and substantive Code of Conduct in the South China Sea (COC) consistent with international law, including the 1982 UNCLOS.
In short, although ASEAN operates on the principle of consensus, it is clear that the ASEAN Chair Statements in recent years refer to principles and methods of dispute settlement based on international law or building COC consistent with international law, including UNCLOS. To date, ASEAN is only a regional grouping that the South China Sea has been internationalized. Therefore, Vietnam has always considered ASEAN as the most important regional mechanism for internationalizing the South China Sea issue in order to protect its legitimate interests in the sea.
[i] UNCLOS provides an effective mechanism for peaceful resolution of maritime disputes, Vietnam Law and Legal Forum, 10 May 2022, https://vietnamlawmagazine.vn/unclos-provides-an-effective-mechanism-for-peaceful-resolution-of-maritime-disputes-48566.html
[ii] UNCLOS provides an effective mechanism for peaceful resolution of maritime disputes, Vietnam Law and Legal Forum, 10 May 2022, https://vietnamlawmagazine.vn/unclos-provides-an-effective-mechanism-for-peaceful-resolution-of-maritime-disputes-48566.html
Laser, water cannon, and now a floating barrier – I explain how Manila is mustering the courage to deal with China’s recent “grey zone” tactics.
On September 22, during a routine patrol around the disputed Scarborough Shoal in the South China Sea, referred to as Huangyan Dao by Beijing and parallelly as Bajo de Masinloc by Manila, the Philippine Coast Guard found a 300-metre-long “floating barrier” placed by their Chinese counterpart, which effectively prevented Filipino boats from accessing a rich fishing spot around the aforementioned shoal, lying about 120 nautical miles away from the Philippine coast and about 480 nautical miles away from the Chinese coast, i.e., four times the distance from the former.
The Philippine Coast Guard removed this blockade in compliance with a presidential order on the same. While international law (UNCLOS) clearly recognises Manila’s sovereign rights over all living and non-living resources in the area as part of its exclusive economic zone (EEZ), Beijing refuses to honour or even acknowledge this fact. Instead, it has given shape to its own baseless, overarching claims, seen as a “nine or ten dash line” in Chinese maps, depending on whether the island of Taiwan is included in it or not. Notably, this farcical line covers almost 90 per cent of the entire South China Sea.
Offensive Chinese posturing
The latest incident occurred while ASEAN’s first non-combat naval drills, named the Solidarity Exercise, were about to conclude and just a month after another incident of a large Chinese Coast Guard ship reportedly using water cannon against a much smaller Philippine boat occurred, inviting condemnation from Washington, Manila’s foremost security ally in the region. Eleven years ago, the Scarborough Shoal was the site of a standoff between Manila and Beijing, following the detention of some Chinese fisherfolk by the Philippine Navy for intruding into the area that fell within Philippine EEZ.
Tensions were diffused only after the U.S. brokering a deal, and following this the Philippine Navy pulled itself out from the area, but the Chinese never left the resource-rich lagoon since then. This led Manila to take the course of international arbitration in 2013, which Beijing refused to cooperate, and later it defied an arbitration ruling that came in the former’s favour in 2016. Earlier this year, in February, China deliberately hit a Philippine Coast Guard vessel with a military-grade laser, which even lead to the temporary blinding of some of its crew.
Coming back to the most recent incident of Chinese Coast Guard building a “floating barrier” on Philippine waters, it should be read as the latest in a series of decades-long dispute involving China on the one side and five ASEAN countries, namely Philippines, Vietnam, Malaysia, Brunei, and Indonesia, plus Taiwan on the other side. With or without a Code of Conduct for the South China Sea, which is currently being negotiated between the two sides, China’s overall offensive strategic posturing towards its neighbours can never be expected to turn benign as long as its overarching claims persist.
The recent provocative actions by China fit into the larger frame of expansionist tendencies it has been showcasing throughout the last one decade, both along its land borders and the seas. China is trying to gain maritime foothold bit by bit through the skilful use of its growing military power, stopping short of a war, but remaining coercive, thereby pushing other countries in the neighbourhood into a defensive mode. These tactical moves, lying in the “grey zone” between peace and war, represent a new normal and a serious challenge to the status quo of the current regional security order lead by the United States Navy and its allies.
Augmented U.S. alliance
Earlier in this April, the United States and the Philippines conducted their largest-ever annual military drills, the three-week-long Exercise Balikatan, meaning “shoulder-to-shoulder’ in the Philippine language of Tagalog, with more than 17,600 combined troops participating, including simulated drills of attacks on enemy warships and live-fire exercises performed for the first time. With Beijing in mind, Manila has also given the U.S. a wider access to its military bases under a recently revived defence pact. Alongside strengthening Manila’s defence capabilities, it grants Washington a stronger foothold to counter what it sees as a bigger threat in the broader region – Beijing’s possible invasion of Taiwan.
The Philippines is a major non-NATO ally of the U.S. for the last two decades and the two countries have forged several security pacts in the past such as the Mutual Defence Treaty of 1951, the Visiting Forces Agreement of 1998 and the Enhanced Defence Cooperation Agreement of 2014. At the same time, the Philippines is overlooking the reality of a large Chinese economic footprint in the country, including the disturbing fact that China still holds about forty per cent stake in its national power grid and that Chinese engineers are still working on critical infrastructure projects across the archipelago.
Manila needs economic decoupling, supply chain diversification and new trading partners to reduce its dependency on China and to stamp out the possibility of Beijing weaponising economic vulnerabilities for geopolitical gains, although a distant prospect. In other words, a security strategy alone is inadequate to deal with the challenges posed by China, which calls for a comprehensive one. However, former Philippine President Rodrigo Duterte used to follow a policy of accommodating China, looking at the prospect of promising economic ties, even while Beijing continued to exercise its exclusionary policy in the neighbourhood.
Rifts back in spotlight
Tensions have been simmering again since last year with the election of a former dictator’s son, Ferdinand “Bongbong” Marcos Jr., as the President of Philippines, who vowed to follow a tough policy in dealing with China. Consequently, U.S. Vice-President Kamala Harris visited the Southeast Asian archipelago in November last year, and in return President Marcos Jr. visited the U.S. in May this year, which was in fact the first visit by a Philippine leader to the White House in almost a decade. The visit followed April’s military drills and President Biden reaffirmed U.S. military’s support to the Philippines, describing it as “iron-clad”.
At the same time, President Macros Jr. is also trying to reach out to his Chinese counterpart Xi Jinping, as evident from his recent visit to Beijing in the beginning of 2023, harbouring hopes of an amicable management of disputes. Unfortunately, just weeks later, the laser incident happened, signalling China’s lack of interest to settle disputes any time soon. When it comes to hard security, China is aware of its strengths and also its limitations against the combined might of U.S. and its regional allies. Reinvigorated defence ties with Washington supposedly gave Manila the confidence to stand up to China’s overtly belligerent activities in the South China Sea.
Beijing’s ultimate ambitions for the broader region, i.e., a complete dominance and the expelling of the U.S., can never materialise without solidifying its territorial claims in the neighbourhood in the first place, which subsequently calls for sustained acts of securitisation and militarisation of the region. This can never happen without provoking its Asian neighbours and also without changing the status quo, which would invite the United States and its allies to respond. All these scenarios point to the hollowness of China’s seemingly benign initiatives such as the “Global Security Initiative” and tend to derail its own efforts in projecting itself as a “responsible” great power in the world.
The jubilant celebration of the 50th anniversary of bilateral relations between Indonesia and South Korea marks not just a milestone but a testament to the enduring power of diplomatic ties and cooperation. As a student of International Relations, it is inspiring to witness the evolution of this unique partnership and explore the boundless potential that lies ahead.
**The History of a Flourishing Friendship**
Over the past half-century, Indonesia and South Korea have shared a remarkable journey characterized by mutual support and collaboration across various sectors. As South Korean Ambassador to Indonesia, Lee Sang-deok, highlighted, this relationship goes far beyond mere diplomacy. It is a tale of firsts – Indonesia being the first country to invest directly in Korea, export production plants overseas, establish oil fields abroad, and host the inaugural KOICA office outside Korea. Indonesia’s role as a pioneer in joint ventures with South Korea extends to advanced weaponry development. This partnership is not only a testament to trust but also showcases the intricate web of relations that shape international politics.
**Strategic Partnerships and Key Roles**
Perhaps the most intriguing aspect of this bilateral relationship is the “Special Strategic Partnership” shared between the two nations. This special status highlights Indonesia’s unique place as South Korea’s essential partner in Southeast Asia. As the only Southeast Asian country engaged in such a partnership, Indonesia plays a crucial role in shaping regional dynamics. Furthermore, Indonesia’s involvement in implementing Korea’s Indo-Pacific Strategy and the Korea-ASEAN Solidarity Initiative (KASI) is a testament to its pivotal role in promoting regional cooperation. Serving as the Chair of ASEAN further underscores Indonesia’s importance in elevating the organization to an epicenter of growth.
**A Future-Oriented Partnership**
In today’s rapidly changing world, the adaptability and future-orientation of diplomatic ties are of paramount importance. Ambassador Lee’s remarks about transitioning from resource development and manufacturing investments to new horizons signify the evolving nature of this relationship. The commitment to fostering a future-oriented partnership is evident in the collaborative efforts in areas like IT, biohealth, climate change mitigation, and the development of new and renewable energy sources. These endeavors not only promise economic benefits but also underline the shared commitment to addressing global challenges.
**Enhancing Trade and Investment**
The Comprehensive Economic Partnership Agreement (CEPA) between Indonesia and South Korea, which came into effect this year, heralds a new era of trade and investment. The active participation of South Korean companies in the development of Indonesia’s new capital city in East Kalimantan is a tangible example of the tangible benefits stemming from this agreement.
**Towards “Indonesia Emas 2045″**
One of the most exciting aspects of this evolving partnership is its alignment with President Joko Widodo’s vision of “Indonesia Emas 2045” or “Golden Indonesia 2045.” As Ambassador Lee eloquently stated, Korea is well-poised to be the optimal partner in realizing this vision. The proverb “Berat sama dipikul, ringan sama dijinjing” (“We share the burdens, and we carry the load together”) encapsulates the spirit of collaboration required to navigate the challenges and opportunities that lie ahead.
From the standpoint of students studying International Relations, the Indonesia-South Korea partnership is a rich source of insights into the intricate world of global diplomacy. In our assessment, this partnership is a testament to the enduring nature of diplomatic relationships. It has withstood the test of time, adapting to changing geopolitical landscapes, leadership transitions, and evolving global dynamics. Such resilience is particularly pertinent in a world where diplomatic ties often face uncertainties and disruptions. The bilateral Comprehensive Economic Partnership Agreement (CEPA) between Indonesia and South Korea is more than just a trade deal; it represents a deep-rooted economic symbiosis. It illustrates the interdependence of nations in the contemporary globalized world, showcasing how economic cooperation can transcend borders and bring about shared prosperity.Indonesia’s central role in ASEAN and its involvement in regional initiatives underscore the importance of understanding regional dynamics in modern international relations. It emphasizes that nations can wield influence and contribute to shaping the geopolitical landscape when they actively engage within a regional framework.The commitment to sustainability and future-oriented collaboration is praiseworthy. In a world grappling with urgent global challenges, such as climate change, the partnership between Indonesia and South Korea serves as a model of responsible diplomacy. This commitment sets an example of how nations can work together to mitigate the consequences of global crises and promote shared solutions.
Furthermore, President Joko Widodo’s vision of “Indonesia Emas 2045” resonates with the aspirations of many nations globally. It underscores the potential for one nation’s success to have far-reaching implications in an interconnected world. The proverb “Berat sama dipikul, ringan sama dijinjing” (“We share the burdens, and we carry the load together”) encapsulates the collaborative spirit required to navigate the opportunities and challenges that lie ahead. In summation, the 50th anniversary of Indonesia-South Korea relations is not merely a commemoration but a celebration of a partnership that has defied time and embraced change. It stands as an example of diplomatic endurance, economic interdependence, and regional engagement. As students of International Relations, we eagerly anticipate the unfolding of this dynamic relationship and recognize its contribution to our understanding of global diplomacy and cooperation. The future holds immense promise, and together, Indonesia and South Korea are poised to seize the opportunities and confront the challenges it presents.
the Golden Jubilee of Indonesia-South Korea relations is more than just a milestone; it is a grand celebration of the past, a vibrant acknowledgment of the present, and a hopeful embrace of the future. This partnership has gracefully transcended geographical and temporal boundaries, shining brightly as a paragon of diplomatic tenacity, economic synergy, and regional camaraderie. As students dedicated to the realm of International Relations, we are not only privileged spectators but also active contributors to the evolving narrative of global diplomacy and cooperation. The horizon ahead is adorned with boundless potential, and Indonesia and South Korea, hand in hand, stand poised to both seize the opportunities and confront the challenges it unfolds.
Southeast Asia
Thailand’s “Asia’s Next Digital Hub” ambition: Where is Indonesia’s position in the digitalization race?
Thailand is one of the countries in Southeast Asia with an ambitious digital transformation program. The program is summarized in one policy called “Thai 4.0”. The Thai 4.0 policy itself is a policy that promotes digital industrial-scale transformation while establishing an economic corridor in eastern Thailand (“Eastern Economic Corridor”) (EEC, n.d). The Thai 4.0 policy is part of Thailand’s more extensive digital transformation policy, namely “A National Digital Blueprint,” which targets the development of Thailand’s digital economy in the next 20 years, where the Thai government targets Thailand to become a developed country in 2037 (Jongwanich, 2022a).
The National Digital Blueprint policy has been formulated by the “Office of the National Economic and Social Development Board” or NESDB since 2019 through the “Digital Outlook” study. The study produces digital transformation indicators and methods by gathering all stakeholders – including government, the private sector and related industries. This study will discuss opinions, suggestions or observations regarding the planned survey of digital transformation indicators, including Thailand’s digital economy. Thailand’s studies and policy formulation were carried out with consultation and evaluation by the OECD “Organization for Economic Cooperation and Development” (Santhika, 2022). From its advocacy function, the OECD also provides “Assessments and Recommendations” to the Thai government regarding digital transformation policies (OECD, n.d).
Thailand’s digital transformation policy looks very ambitious and promising. Various factors support this policy starting from infrastructure and regulations to geographical position. In 2020, 84 percent of the population shopped online compared to a global average of 77 percent, according to the 2021 Global Digital Report compiled by research firms “We Are Social and Hootsuite” (SCMP, 2021). This large number of internet users makes Thailand a good location for investing in the digital economy. The regulatory factors through the “Thai 4.0” policy above make Thailand one of the countries in Southeast Asia with the most expansive 5G network and the construction of the most advanced technology zone in the “Eastern Economic Corridor.” Thailand’s very strategic position also supports this vision where Thailand is in the “middle” of the Southeast Asia region, connecting the Pacific Ocean in the East and the Blue Continent in the West. All these factors support the ambition of “The Asia’s Next Digital Hub” in the Southeast Asia region (BangkokPost, 2021).
However, the ambitious policy poses several obstacles in its implementation. Some of these obstacles can be summarized into two: first, the selection of industries in Thailand to carry out digital transformation which seems not yet ready, especially in the EEC corridor.
According to Kohpaiboon (2020), this happened because the contours of Thailand’s economy, which has not yet been diversified, still show vulnerability from industrial-scale digital transformation – because Thailand’s economy is still very dependent on tourism. As many as 6 of the 10 selected industries only contributed 50 percent of gross manufacturing output. This uncertainty is even worse in the era of disruptive technology (Kohpaiboon, 2020).
Budget constraints hinder digital transformation progress in Thailand. Private investment in Thailand’s digital economy only amounted to 4 percent of Gross Domestic Product in 2019. Limited budget allocations in a number of government agencies are also a problem, especially the relatively small funds allocated to the Ministry of Digital Economy and Society as well as the Ministry of Education and the Ministry of Higher Education, Science, Research and Technology to promote digital transformation in respective fields (Jongwanich, 2022b). This can be seen from the digital transformation fund allocation of only 2.5 billion baht which will be set aside for digital development projects that will be financed by the Digital Economy and Community Development Fund (DE Fund), while Thailand’s education budget itself is 300 billion baht (Sharon, 2022; Lessa-Nguansuk., Suchit, 2023). This shows the contrast in allocating funds for digital transformation needs with other primary priorities in Thailand.
Suppose you look at it from Indonesia’s side. In that case, Indonesia also has the vision to become a developed country in 2045, with digital transformation being one of the main pillars or instruments in its “Indonesia Maju 2045” program. Indonesia is also on its leadership in the G20 2022 and the ASEAN Chairmanship in 2023, bringing various digital transformation initiatives to both conferences. As in the 2022 G20, Indonesia initiated the 2022 “Digital Economy Working Group” (DEWG) and Indonesia initiated the formation of the “Digital Economy Framework” at its chairmanship in the ASEAN 2023 Chairmanship. Despite being one of the key players in the development of digital transformation in the region, Indonesia also found various challenges in carrying out the transformation process.
In contrast to Thailand, whose challenges are focused on two causes: diversification and budget, Indonesia is experiencing challenges in terms of human resources, access and digital infrastructure in its implementation. In the context of human resources, Indonesia currently lacks digital talent (digital talent gap); where 1000+ technology companies in Indonesia are actively looking for technology talent in 2018, a 5x increase from 2017 while there is a gap of 600,000 per year between tech talent/digital talent with demand from the technology sector in Indonesia (ITB, 2021). This is exacerbated by the fact that only 20% of the total 4,000 campuses in Indonesia have Information and Communication Technology (ICT) study programs.
Regarding access and infrastructure, Indonesia still needs to have adequate access and infrastructure development, which has created gaps. The gap in access and infrastructure in Indonesia is caused by many, from the broad geographic contours to the limited electricity resources that are evenly distributed. The gap is also reflected in significant differences in bandwidth power (outside and within Java), the unavailability of adequate and affordable internet devices such as modems, the inability to produce local content and knowledge, including a lack of literacy, adequate digital skills and gender-based gaps (ELSAM, 2022). Infrastructure gaps like this hinder the digital transformation process in Indonesia.
Referring to the 2023 “Digital Quality of Life Index” issued by Surfshark, Indonesia is ranked 67th out of 121 countries assessed globally. Meanwhile, Thailand is ranked 51st or 16 points ahead of Indonesia. In the Asian region, Indonesia is ranked 21st while Thailand is in 12th position out of 35 countries in Asia assessed. This index assesses five variables: internet quality, affordability, cyber security, online government services, and electronic infrastructure. From these five variables, Thailand outperforms Indonesia. According to Kaziukonis, CEO of Surfshark, Indonesia has the opportunity to improve all sectors related to Digital Quality of Life, especially regarding internet affordability (CNN, 2021).
As two middle-power countries and quite influential in Southeast Asia, Indonesia and Thailand are “competing” with each other in the digitalization process to win the race. With its unique characteristics and challenges, each country can start to resolve the problems arising from this ambitious policy. Thailand can diversify its economy, which depends on tourism, or Indonesia should take advantage of the demographic bonus as digital-ready talent after graduating from college. Both countries have the same potential to achieve their respective goals of becoming digital countries by the 2040s. However, one question needs to be addressed and is worth to be pondered: Do innovation and transformation need to be suppressed by policy or do we need policies that are also innovative to accommodate these changes?
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