What Will AI Mean for ASEAN?

AI was high on the agenda during President Joe Biden’s state visit to Vietnam last week. After a series of meetings, the White House announced plans for American companies Microsoft, Nvidia, and others to deepen cooperation and investments in the country. The outcome was a sign of things to come for the member countries in the Association of Southeast Asian Nations (ASEAN). As both the U.S. and China seek to use AI to strengthen their influence in the region, the bloc will have to navigate both opportunities and risks posed by the new technology.

So far, ASEAN has been moving to develop governance and strategies for AI, though at a relatively slow pace and with more input from some nations over others. Among ASEAN’s 10 members, only Singapore is positioning itself as an AI leader. Thailand, Malaysia, Indonesia, Brunei, Vietnam, and the Philippines are all embracing AI but have yet to do much in the way of concrete strategy or regulation. For ASEAN’s lower middle-income members – Myanmar, Cambodia, and Laos – AI is far from an urgent priority, as poverty and internal conflicts demand attention.

Despite these differences, it will be important for ASEAN to coordinate among its members to develop guidelines and frameworks to advance the opportunities of AI while minimizing the risks. Specifically, ASEAN leaders should focus on three areas where AI is set to have a big impact on the region: geopolitics, economic growth, and sustainable development.

In terms of geopolitics, AI could end up bringing ASEAN members closer to China at the expense of the United States. Despite the recent state visit by President Biden, Beijing has been more aggressive in leveraging the technology to create new opportunities for cooperation in the region. Six years ago, Beijing declared its objective to become the world’s “AI superpower” by 2030. Part of that plan involves greater investment and engagement with ASEAN members. AI has been a focus of the Digital Silk Road initiative, in which China invests in the digital economies of countries including Thailand and Malaysia.

Recently, Beijing has launched a variety of AI-themed collaborations with ASEAN, including innovation centers, competitions, and summits. Earlier this year, the Wall Street Journal reported that Chinese tech giants Alibaba, Huawei, and Tencent planned to invest hundreds of millions of dollars to build data centers in Southeast Asian countries in part for AI applications. Analysts expect ASEAN will increasingly become a “testing ground” for consumer AI tools and technologies developed by Chinese companies.

By contrast, the U.S. has made fewer investments and pledges of cooperation. Digital cooperation was a priority in the 2021 ASEAN-US Summit, from which an ASEAN-US Leaders’ Statement on Digital Development included a commitment to “exchanging views and best practices on the design, development and deployment of AI, and promote partnerships for AI research and development, while supporting capacity building activities on the responsible use of AI.” However, even after President Biden’s visit to Vietnam, relatively few concrete plans and investments have emerged.

As a bloc, ASEAN should be careful to consider the risks of siding too heavily with China versus the U.S. on AI. For instance, the technology could enable Beijing greater access to information and data that could compromise national security and sovereignty.

For the second area, economic growth, AI could help ASEAN members more rapidly develop their largely manufacturing- and agriculture-dependent economies. The adoption of AI tools in logistics, human resources management, and other business processes, as well as in the education sector, could be especially impactful. According to the US-ASEAN Business Council, AI could add $1 trillion to the GDP of Southeast Asia by 2030, an 18 percent increase. One-third of that growth is expected to come in Indonesia, the largest economy in ASEAN.

At the same time, AI might displace workers and cause social disruptions. These risks are especially high for the business process outsourcing industry, in which many Southeast Asian workers are employed. For instance, in the Philippines, outsourcing accounts for 7.5 percent of the country’s GDP. As chatbots and other generative AI tools enable companies to replace customer service agents in call centers, one report suggested that in the Philippines some 1.6 million employees could face dislocation. It will be crucial for policy makers in ASEAN to prepare for such scenarios by prioritizing investments in social safety nets, workforce retraining, and other programs that could address worker displacement.

Finally, ASEAN should make full use of AI tools to help advance Sustainable Development Goals. Two areas in particular are natural disaster management and food security. ASEAN countries are on the frontlines of climate change, already enduring the impacts of worsening storms, more frequent floods, and rising temperatures. The metropolises of Jakarta, Bangkok, and Ho Chi Minh City are all threatened by rising sea levels, with the latter expected to be underwater by 2050.

AI tools could be vital for natural disaster warning and response systems. They could help forecast the path of tropical cyclones and anticipate, identify, and classify damages, as well as plan delivery routes and funding requirements for response and recovery. Especially in ASEAN’s lower-income members that are highly dependent on agriculture, AI could help predict adverse weather and improve crop yields.

For all of these areas and others, ASEAN should play a role in helping its members manage risks and capture opportunities from AI. The group should create a more dedicated coordination body of policy makers and technologists that can set overarching frameworks and advise members on regulations and implementation. If managed wisely, AI could help the region develop, while at the same time preserving both external and internal security.