Malaysia Proposes ASEAN Framework For E-Commerce

Posted on February 25, 1998 
Filed Under AsiaBizTech, Julian

By Julian Matthews

February 25, 1998 (KUALA LUMPUR) — Malaysian Prime Minister Mahathir Mohamad proposed the establishment of an ASEAN Framework on Electronic Commerce, to address key issues on e-commerce from a regional perspective.

ASEAN is the Association of Southeast Asian Nations, comprising 10 nations.

Mahathir said the framework is necessary because some countries that already have established e-commerce infrastructures may have leads over other countries. The regional initiative would form the basis for discussions about the various legal, financial and cross-border implications of the emerging digital economy, he said.

Mahathir made the comments in an address at a roundtable conference on Electronic Communities in Asia, staged by the London-based Economist Group here on Feb. 13.

The proposed framework is in response to U.S. President Bill Clinton’s position paper, “A Framework for Global Electronic Commerce,” unveiled in July 1997. It calls for a tariff-free environment for delivery of services and products across the Internet. The Clinton administration has submitted its proposal to be part of the agenda of the World Trade Organization (WTO) General Council meeting.

While Clinton’s duty-free proposal is supported by some U.S. trading partners, emerging economies remain cautious about its implications.

At an earlier press conference, Mahathir said the proposal had to be examined carefully. He said that any decision would be permanent. Malaysia is not in the same class as the United States, and could not give up any opportunity to raise funds for the government, he added.

“We must be as open as possible, but at the same time protect our national interests,” Mahathir said.

In his speech, Mahathir said that although e-commerce was still in its infancy, it represents a new frontier that would revolutionize the way business is transacted globally.

“The Internet has already become an effective conduit for commercial transactions, with total annual sales of US$1.2 billion in 1996,” he said.

Although this sum is small, analysts have predicted total annual sales in excess of US$186 billion by 2005.

“The magnitude and impact of this growth will have far-reaching implications, not only in the commercial world but also in governance,” he noted.

Mahathir said that e-commerce presents challenges to governments to keep up with technological changes. “Many of the existing rules that apply in today’s economy can no longer be applied in the digital economy,” he said.

He explained that among the issues requiring review are those of customs and taxation, electronic payment systems, Internet banking, Internet brokerage services, cross-border transactions, copyright protection, cross-certification of public key infrastructures and common-platform smart cards.

“Whether we like it or not, e-commerce will become part of our lives. We should all prepare to embrace it, or be left behind,” Mahathir said.

Mahathir noted that the government is implementing the Multimedia Super Corridor, a 750-sq.-km high-technology zone south of Kuala Lumpur, to test out new ideas and technologies.

He added that although the government has felt the pinch of the devalued currency, the expense for the project is well within Malaysia’s capacity and the project will go on.

Published in Asia BizTech, Feb 25, 1998

by Julian Matthews, Asia BizTech Correspondent

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