Australia should bet on digital engagement with Southeast Asia
29 Jun 2021|

As competition between the United States and China intensifies, Southeast Asia is becoming the key competitive arena. Australia’s engagement with the region is not only a matter of being a good neighbour; it’s a strategic imperative.

In November 2020, the government announced more than $500 million to support Australia’s Southeast Asian neighbours in a wide range of development goals, including in infrastructure, maritime resources and public health. While the commitment is welcome, it’s designed to provide immediate assistance—within a three- to four-year timeframe—and is far from meeting the long-term needs of this complex region of more than 670 million people.

Canberra intends to ‘compete constructively’ with other powers in the region, the foreign minister, Marise Payne, declared in December 2020. But dollar-for-dollar competition is neither feasible nor desirable. Current spending in Southeast Asia is a drop in the ocean compared with the $1.4 billion promised for the much smaller region of the Pacific islands for 2019–2021. Limits to aid resources are likely to continue, at least in the near term, due to the economic fallout from the Covid-19 pandemic.

Despite a shrinking aid budget, Australia can still make a valuable contribution if it invests smartly and generously in Southeast Asia’s future and focuses on areas in which it has expertise and experience. The best way to offset the asymmetry is for Australia to bet on digital and tech diplomacy.

Australia’s Southeast Asian engagement should focus on building the region’s digital capacity. Australia has already begun to do this through various agencies, but its support is delivered mainly through aid. With the trend of cuts to aid budgets, it will be a challenge for Australia to make an impact through aid alone.

Instead, Australia should adopt a comprehensive and long-term strategy that would modernise its traditional diplomacy and would effectively support the region’s resilience to cyberattacks, address its immediate needs and invest in its growing potential. This should be a whole-of-government commitment, similar to the Pacific step-up.

The pandemic has accelerated the digital transformation across the globe. But digital capability and cyber maturity across Southeast Asia is very uneven. Singapore, for example, is one of the world’s most technologically advanced countries, while Laos and Myanmar lag far behind. At the same time, Southeast Asia is one of the most dynamic regions in the world when it comes to adapting to technological change.

Indonesia, Vietnam and Thailand are developing e-commerce markets and homes for some of the world’s most energetic innovation hubs. This should inform and shape Canberra’s strategic and commercial engagement with the region, and its approach to development aid. Australia can make a significant contribution in bridging gaps between different countries’ digital capabilities. Its cyber capacity and resilience are among the world’s top 10, according to Harvard University’s 2020 National Cyber Power Index.

But the pandemic has further exposed and deepened digital divides within individual countries. For example, when schools closed, online teaching was only an option for those with access to computers and the internet. Children in rural, poorer or less connected places missed out on education—the very means to overcome poverty and limited opportunities. If not addressed, this has the potential to create a ‘Covid generation’ that will have lost key educational opportunities.

Similarly, occupations were disrupted to varying degrees by the pandemic. Southeast Asia has a strong informal service-based economy. The national lockdowns, and the tourism and business travel freezes, took away the livelihoods of many, particularly in the hospitality and services sectors. Australia could help to support efforts to retrain workers and teach them digital skills.

Digital, tech and science capabilities are critical for the longer-term post-Covid recovery. In helping to fund initiatives across Southeast Asia, Australia will forge durable economic ties with its partners in the region—including countries such as Indonesia, Thailand and Vietnam, which are expected to surpass Australia’s GDP in a couple of decades. Australia’s support should be considered an investment in future two-way development, rather than just one-way aid.

The strategy should include supplying computers and hardware, improving skills, and retraining and assisting the region’s workforce to adapt to the technological revolution. Some action is already underway. For example, Australia’s CSIRO, in partnership with the Department of Foreign Affairs and Trade, operates in Singapore, Vietnam and Indonesia to support training in science, biosecurity, technology and the digital economy. But this work needs to be increased and should form part of an overarching policy.

The Australian government has already pursued a cyber engagement strategy that seeks to support an open, free and secure internet globally. As part of that, it has assisted the ASEAN states to familiarise themselves with the United Nations’ cyber norms and conducted cyber capacity-building workshops in Southeast Asia.

But these initiatives remain small, are not specifically designed to target Southeast Asia, and involve only a limited group of policy elites. The government also introduced a cyber cooperation program, which will provide $34 million in grants over seven years to help countries with cybersecurity, and promote online human rights, democracy and gender equality. It’s a great start—but if Australia has ambitions to play a substantive role and provide viable options throughout the Pacific, South Asia and Southeast Asia, more resources will be needed.

In particular, initiatives should be significantly expanded to encompass grassroots training across all levels of education, including early digital education for young students, cyber literacy programs in rural and remote areas, and retraining the workforce to adapt to new job demands.

Australia was one of the first nations to appoint an ambassador for cyber affairs and support the UN to develop universal cyber norms. But Australia should further support Southeast Asian partners to improve their security standards and cyber norms and bridge the region’s digital gap.

And if the Australian government is interested in regional partners sharing its views on security and on decisions such as its ban on Chinese firm Huawei from participating in its 5G rollout, there needs to be a much more equal level of cyberawareness among Southeast Asian governments and societies.

Earlier this year, the government launched Australia’s international cyber and critical tech engagement strategy, which rests on similar principles and norms to its general foreign policy. The strategy is an extension of existing commitments to the issues and shows Canberra’s recognition of the value of highlighting cyber cooperation with India and other regional partners, including ASEAN. It is a solid step in the right direction and would be a good starting point to build a fully Southeast Asia–centered digital engagement strategy.

The government has also allocated 1.5 million to support ASPI to host the Sydney Dialogue in 2021, a new annual international summit focused on issues related to cyber and critical technology.

By marrying traditional aid with modern digital diplomacy, Australia can mitigate some of the effects of its development budget cuts. A tailored strategy would harness the talents of the next generations of Southeast Asians and extend the reach of Australian dollars by allocating them in an area where a true difference can be made. Australia could provide the region with what it really needs and ensure long-term change. Early investment and involvement in Southeast Asian digital growth is not charity; it is investing in Australia’s own economic future.