Fact Check: Digitalization is Boosting Regional Trade in Southeast Asia
What We Know
Digitalization has significantly impacted trade dynamics in Southeast Asia, particularly through the growth of Digitally Delivered Services (DDS). According to a report by the ISEAS – Yusof Ishak Institute, DDS exports in six Southeast Asian economies have shown consistent growth over time, with Singapore leading as the largest exporter and importer of these services (source-1). The report highlights that the services sector is the largest in the ASEAN-6 economies, contributing over 50% of GDP, although traditionally, services were considered non-tradable due to proximity requirements. Digitalization has mitigated these barriers, allowing sectors like IT, finance, and education to operate remotely (source-1).
Furthermore, a forecast from the U.S. Department of Commerce indicates that Southeast Asia's internet economy is projected to grow from USD 194 billion to over USD 330 billion by 2025, signaling robust growth in eCommerce and digital trade (source-2). This growth is driven by increased digital connectivity and the adoption of eCommerce platforms across the region.
Analysis
The evidence supporting the claim that digitalization is boosting regional trade in Southeast Asia is substantial. The ISEAS report provides a detailed analysis of DDS, illustrating how digital services have become a significant part of the region's trade landscape. The report notes that while there are challenges such as digital connectivity and regulatory barriers, the overall trend shows a marked increase in the export of DDS, particularly during and after the COVID-19 pandemic (source-1).
Moreover, the forecast from the U.S. Department of Commerce reinforces this perspective by projecting significant growth in the internet economy, which encompasses eCommerce and digital services (source-2). This growth is indicative of a broader trend towards digitalization that is reshaping trade patterns in the region.
However, it is essential to consider the reliability of the sources. The ISEAS Institute is a reputable think tank specializing in Southeast Asian studies, lending credibility to its findings. The U.S. Department of Commerce is also a reliable source, providing data and forecasts based on extensive research and analysis. Both sources are considered authoritative in their respective fields.
Conclusion
The claim that digitalization is boosting regional trade in Southeast Asia is True. The evidence presented from reputable sources indicates a clear trend of growth in digitally delivered services and the overall internet economy in the region. Despite existing challenges, the trajectory of digital trade suggests that digitalization is indeed enhancing trade opportunities across Southeast Asia.
Sources
- 2025/32 "Cross-Border Digitally Delivered Services in Southeast Asia" - ISEAS Perspective
- Southeast Asia Region eCommerce Forecast - U.S. Department of Commerce
