Why Southeast Asia Needs to Collectively Harness AI

Why Southeast Asia Needs to Collectively Harness AI

Artificial intelligence is revolutionizing the global landscape, presenting both new possibilities and challenges across multiple sectors. The swift adoption of AI technology brings to the fore critical ethical, societal, and legal considerations that necessitate thoughtful regulation. In the culturally, economically, and politically varied terrain of Southeast Asia, the development of AI governance is a multifaceted and pressing endeavor requiring collaboration among diverse stakeholders.

As a vibrant and burgeoning region, Southeast Asia boasts over 650 million inhabitants and a collective GDP of $3.2 trillion. The region has rapidly adopted digital innovation, a trend that the pandemic has significantly bolstered, escalating the demand for, and provision of, digital services and solutions. AI stands at the forefront of this technological leap, offering enhanced capabilities and efficiencies across numerous fields, including e-commerce, financial technology, healthcare, education, agriculture, and the development of intelligent urban infrastructure.

According to a report, AI could significantly boost Southeast Asia’s economy, potentially increasing GDP by 10 to 18 percent by 2030, which translates to an increase of nearly $1 trillion. Further research by IDC underscores AI’s pivotal role in regional business, with 83% of Southeast Asian business leaders affirming its critical importance for competitiveness. Additionally, AI is recognized as a catalyst for societal benefits, with 86% of business leaders and 77% of workers in the region confident that AI will help overcome social challenges and enhance citizens’ quality of life.

Nonetheless, several obstacles impede the full realization of AI’s potential in Southeast Asia. These barriers include a scarcity of AI expertise and talent, insufficient awareness and trust in AI, subpar data quality and governance, and inadequate infrastructure and digital connectivity. Consistent among various studies is the consensus on the necessity for a robust, cohesive AI regulatory framework. Such a framework should tackle AI’s ethical, social, and legal challenges, including issues related to privacy, security, accountability, transparency, fairness, and human rights.

Regulating AI is a nuanced task that encompasses multiple aspects, including technical, legal, ethical, social, and economic dimensions. The approach to AI regulation must consider the varying contexts, purposes, and impacts of AI applications, as well as the differing values, norms, and interests of stakeholders like governments, businesses, civil society, academia, and end-users. Developing AI regulations calls for a measured approach that safeguards AI’s safety, security, and trustworthiness while promoting its innovation, competitive edge, and inclusivity.

Formulating AI regulations in Southeast Asia offers distinct challenges and opportunities. A primary challenge is the lack of a coordinated vision for AI development and governance, leading to potential inconsistencies and disjointed efforts among the region’s nations.

The discrepancy between rapid AI advancements and the slower development of regulations may cause uncertainty and inefficiency. Policymakers and regulators also face a delicate balance between fostering AI innovation and the imperative for regulation, which may lead to complex trade-offs.

Addressing the differing priorities and values of stakeholders on AI ethics, including privacy and human rights, adds to the challenge. Moreover, tackling AI’s transnational elements, such as data sharing and enforcement across borders, adds complexity.

Opportunities are present as well. Regional collaboration could capitalize on collective strengths, resources, and knowledge, promoting shared best practices. Engaging stakeholders in the regulatory process can lend greater legitimacy and effectiveness to AI policies. Additionally, this engagement offers a chance to pilot innovative regulatory approaches like co-regulation or soft law.

Southeast Asia has the potential to lead in AI governance, setting a precedent for other developing regions and contributing a valuable perspective to the global AI discourse.

Given the intricate landscape of AI regulation in Southeast Asia, it’s essential for nations and stakeholders within the region to collaboratively forge a unified and coherent vision and strategy for the development and governance of AI. This shared direction should emphasize a human-centric and value-based regulatory approach, placing human interests, rights, and dignity at the heart of AI’s design, development, and application. It’s vital that AI supports and enhances the values and principles prevalent in Southeast Asian societies, including diversity, inclusivity, and sustainability.

The regulatory framework must also be risk-based and context-specific, assessing the potential and actual risks associated with AI applications and customizing regulations to fit the intended use and potential impact of AI, distinguishing between varying levels of risk.

A comprehensive strategy is necessary, one that spans the entire AI lifecycle from data collection to deployment and monitoring. This strategy should ensure that all AI-related policies and regulations, such as data protection and human rights, are in sync and coordinated.

Incorporating a collaborative and participatory methodology in AI regulation is also important. This means actively involving stakeholders from government, business, civil society, academia, and the user community in the development, implementation, and review of AI policies, fostering a culture of trust, transparency, and accountability.

Lastly, an adaptable and evolutionary approach to AI regulation is crucial, one that continuously monitors and assesses the effectiveness of AI policies and regulations and is flexible enough to update and revise them in response to the fast-paced changes and advancements in AI technology and applications. By adopting such a vision and strategy, Southeast Asia can secure AI’s safety, trustworthiness, and beneficial growth, while also nurturing innovation, competitiveness, and inclusivity.

Southeast Asia’s vibrant growth is increasingly powered by artificial intelligence, which brings both opportunities for expansion and complex ethical considerations. As the region becomes a formidable economic power in a tech-driven world, the development of thorough AI regulations is crucial.

The rise of AI in Southeast Asia heralds transformative prospects, driving sectors forward and hinting at significant economic benefits. However, the region faces challenges like skill gaps, infrastructural deficits, and governance issues that hinder the full benefits of AI, highlighting the need for comprehensive regulations.

Regulating AI in this dynamic region involves navigating a complex web of social, economic, and ethical factors. While the lack of consistent vision among nations, the mismatch between rapid innovation and slow regulatory response, and varied interests among stakeholders add layers of difficulty, these challenges also open doors to collaborative and innovative regulatory approaches.

The path ahead calls for a unified effort to create a regulatory environment that prioritizes human values and is flexible enough to adapt to new developments. By fostering a framework that is rooted in human welfare, context-sensitive risk management, thorough oversight, collective engagement, and responsive governance, Southeast Asia can establish a robust and forward-looking AI governance structure.

Regulating artificial intelligence in Southeast Asia transcends routine compliance; it represents a collaborative venture to maximize the benefits of AI while protecting societal norms and individual freedoms. This collective effort by Southeast Asian countries to tackle the intricacies of AI regulation is not just about ensuring responsible and ethical use but also about establishing the region as a leader in the global discourse on AI governance.

As Southeast Asia progresses, the impact of its collaborative approach to AI regulation will resonate beyond its borders. This initiative is symbolic, showcasing a commitment to balancing technological innovation with ethical standards. It is reshaping the narrative of technological progress to one that aligns with the well-being of society. Through these concerted efforts, Southeast Asia is crafting a story of transformation, one where advances in technology are in step with the enrichment of our human experience.

 

Source: https://intpolicydigest.org/why-southeast-asia-needs-to-collectively-harness-ai/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author. The latest book is Web4: The Age of Autonomous Intelligence.

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Op-ed by Anndy Lian: The rise of the use of blockchain and crypto in Southeast Asia

Op-ed by Anndy Lian: The rise of the use of blockchain and crypto in Southeast Asia
By Anndy Lian – Oct 29, 2021 | 09:25 AM GMT+7

TheLEADER A recent Chainalysis report showing stellar growth in cryptocurrency adoption in Central and Southeast Asia (CSAO), making it the fourth-largest crypto market in the world, should come as no surprise.

According to the blockchain analytics firm, the region saw a 2 per cent growth in global market share between July 2020 and June 2021. Which may on face value does not sound significant, but this growth made CSAO the fourth-largest cryptocurrency market in the world, with over $572.5 billion in value sent during the year. This number represents 14 per cent of total global cryptocurrency transactions – and a growth rate of 706 per cent for the region for the year July 2020 to June 2021.

This rosy regional picture of Southeast Asian crypto development had a reality check when on September 24th, the People’s Bank of China (PBoC) announced that all cryptocurrency transactions in China are illegal.

“Virtual currency-related business activities are illegal financial activities,” the PBoC confirmed, warning it “seriously endangers the safety of people’s assets”. Is this a sign that crypto innovation in Southeast Asia is stalled, or are there good reasons for optimism despite the China ban?

“We will see an increasing exodus of Chinese crypto entrepreneurs, and I believe it will lead to a diffusion of crypto technology in Southeast Asia and accelerate the rise of Southeast Asia as a hotbed of crypto innovation,” said Singapore-based Lily Z. King, writing in Forkast.

King suggested an upside to all the FUD caused by the ban, which will drive a significant decentralization of crypto power from China to other markets, particularly Southeast Asia.

“As the economy of Southeast Asia has been heavily impacted by the Covid-19 crisis, the new inflow of crypto capital and technology might bring a much-needed boost for their digital economy. Taking the long-term perspective, this diffusion is good for the builder-type among Chinese crypto entrepreneurs and is good for the crypto movement globally,” she concluded.

If that thesis is correct, what existing trends in crypto/blockchain are likely to simply accelerate, rather than jump-starting new innovation?

In the Chainalysis report, which to note looks wider than Southeast Asia to include central Asia and Oceania, there has been a marked growth in decentralized finance (DeFi) activity. From May 2020, DeFi activity (as a share of all transaction volume) skyrockets, reaching above 50 per cent by February. This activity is primarily driven by Uniswap, Instadapp, and dydx, with significant activity on Compound, Curve, AAVE, and 1inch.

But behind these insights what can we see in regional user and business adoption that can help understand the possible impacts of the China ban?

The island-state of Singapore is widely regarded as a leading force for crypto and blockchain adoption. According to a Hacker Noon article, there are 634 companies incorporated in Singapore related to crypto, with a total value of $8.3 billion according to CoinMarketCap.

Despite this existing activity, in late 2020, a new multi-million-dollar program was launched to strengthen Singapore’s blockchain ecosystem. One of the program leaders, the Infocomm Media Development Authority (IMDA), said the need for such support was due to the lack of large-scale successful use cases outside the fintech sector which was hampering mainstream adoption.

“Its nascence means end-user companies have a lack of codified business models on how to work together using blockchain’s trusted environment. The industry is showing signs of silo-ed, specialized, blockchain solutions rather than interoperable network blockchains,” said IMDA.

The IMDA also noted that support for startups seeking like-minded partners was lacking. While the Singapore Blockchain Ecosystem Report 2020, published at the end of last year, found that the coronavirus pandemic had accelerated the application of blockchain technology, used to verify health credentials.

A key driver for crypto businesses setting up shop in Singapore, independent of the latest China ban, is the regulatory clarity provided by the Monetary Authority of Singapore (MAS). And indeed, Singapore is already home to many Chinese crypto companies, including Binance, the world’s largest cryptocurrency exchange founded in China.

“Singapore provides the regulatory clarity with various regulations for different kinds of crypto activities (payment tokens, securities, custody, crypto fund management, etc.). Naturally, that would be attractive for any crypto companies, whether from China or elsewhere, to consider setting up shop in Singapore,” said Chia Hock Lai, co-chairman of Blockchain Association Singapore.

Consider the demographics of the region’s top six economies (Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) with a combined population of around 580 million, of which half are aged below 35.

In terms of grassroots adoption of crypto, as opposed to business adoption in Southeast Asia, Vietnam not only tops the rankings for the region but for the world when calculated in terms of the transaction volumes for peer-to-peer (P2P) platforms.

As Chainalysis reported, for their 2021 global report, many residents use P2P cryptocurrency exchanges as their primary on-ramp into cryptocurrency, often because they don’t have access to centralized exchanges. Another reason given for the high uptake in Vietnam is the interest in gambling, which as its illegal gives a boost to demand for such activities through crypto-assets.

Southeast Asia also has a sizable unbanked population, primarily found in Indonesia, the Philippines, and Vietnam. Of the estimated 1.7 billion unbanked people today, 290 million live in the region. This is another contributing factor behind the high P2P uptake, certainly, it’s why Facebook’s crypto wallet Novi is predicted to have a high uptake in the region.

In the Philippines for example, 71 per cent of adults do not have a bank account, according to a 2019 report by the country’s central bank. And unlike the US where younger users have failed to drive Facebook adoption, in the Philippines, almost 33 per cent of the users are aged 18 to 24. This user profile is supported by figures from Metamask, with Filipinos making up a fifth of its ten million active monthly users – driven by the success of the NFT-based game Axie Infinity which allows people to earn by playing.

“The largest swath of gamers on the platform come from the island nation – a little more than 40 per cent – according to the powerhouse behind Axie Infinity, a Vietnamese startup called Sky Mavis,” according to Business Insider.

“The biggest driver for crypto over the next few years is not going to be DeFi, it’s not going to be opening up centralized exchanges. It’s going to be GameFi,” Lu said in a recent Forkast report.

“GameFi is going to drive the crypto adoption in Southeast Asia and South Asia…blockchain games and a play-to-earn sector is what is going to take the adoption of non-crypto users and [turn] them into crypto users once they realize that they can earn more money or supplement their earnings with the game where they can play for two hours, three hours. It’s pretty crazy,” Lu confirmed.

The rich diversity of crypto adoption, whether successful crypto-based businesses or grassroots play-to-earn gamers, shows that there is great potential in Southeast Asia.

While Singapore in many ways is leading the way, the need as identified by the IMDA for interoperable network blockchains underlines that there has to be coordinated action from all stakeholders, to make Singapore the world’s leading user of decentralized technology, faced with the concerted efforts of the Chinese state to be the dominant blockchain power.

Whether it’s better serving the needs of the unbanked, or leading the way in the use of blockchain to spur medical research, the opportunities for innovation are there for the taking.

 

Original Source: https://e.theleader.vn/the-rise-of-the-use-of-blockchain-and-crypto-in-southeast-asia-1635393795663.htm

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author. The latest book is Web4: The Age of Autonomous Intelligence.

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