Powering trade and economic prosperity through data free flow
MALAYSIA is helming the Asean chairmanship this year, marking a significant milestone for the nation, with a clear opportunity to chart shared prosperity for the bloc. In light of geopolitical tensions and tariff uncertainties globally, fostering stronger partnerships in this environment would pay dividends in continuing to lift regional economies.
One way to tackle both objectives is by facilitating trade – perhaps not in the traditional sense of import and export of goods as most would think, but instead through cross border data flows, which is increasingly the invisible lifeblood of economies in the region and beyond.
The upside of open data flows is compelling – the OECD (Organisation for Economic Co-operation and Development) indicates global GDP can expand by 1.77% and exports by 3.6% if open data flow is adopted around the world. The catch? To get there requires clarity and collaboration across borders.
When considering the free flow of data, a common misconception is that it comes at the expense of data sovereignty and security. In practice, this is not the case. The Covid-19 pandemic disruption to global supply chains offers a pertinent case-in-point: interconnectivity, be it of goods or data, drives growth.
It is possible to advocate for data free flow while also having regard to data privacy, security, and intellectual property concerns.
At its core, data security is dependent on how data is maintained and not the location where it is stored. This highlights the importance of governments in establishing robust privacy and data security regulations as well as appropriate infrastructure to ensure responsible use of data.
It is possible to advocate for data free flow while also having regard for data privacy, security, and intellectual property concerns, says Cen.
Another arena is around trade agreements – which have historically helped facilitate collaboration and boost economies of nations involved. Digital trade has overtaken traditional trade in economic value for more than a decade now, highlighting the growing need for trade policy to include guidance on robust treatment, security, and sharing of cross-border data.
Regulatory progress notwithstanding, advocating for data free flow should continue to be a priority for markets throughout the region, including Malaysia, who stands to benefit. This opportunity comes down to trust and collaboration between states – including their respective governments, regulators, and businesses.
The good news is that we're seeing the region chart progress in this respect, particularly with Asean's new Digital Economy Framework Agreement (Defa) currently under negotiation. The Defa's mandate is to create an open, secure, and inclusive digital economy of tomorrow for the nearly 680 million people in South-East Asia, and cross border data flow is a critical element in achieving this ambitious goal. With the right checks and balances, it is possible to establish data free flow with trust that can establish greater openness that powers markets and, ultimately, creates greater prosperity for the greater good.
The digital economy is projected to reach US$16.5 trillion (RM70.6 trillion) and capture 17% of global GDP by 2028. South-East Asia is best positioned to capitalise on this growth with one of the world's highest mobile penetration rates at 136%, and with its digital economy projected to double to US$2 trillion (RM8.6 trillion) by 2030. Markets and venture capital already see the unique opportunity here: digital economy-related investments make up 71% of deals in Asean – 10% higher than the global average. The situation on the ground in Malaysia is equally promising, with investor confidence, innovation and a strong ecosystem pushing digital investments by 125% to RM29.47bil in the second quarter of 2025. All the signs are that the digital economy will facilitate the next wave of prosperity for the region – and the ways in which data is shared and managed have an outsized impact in shaping that wave.
Malaysia has a unique opportunity to drive the data agenda that simultaneously benefits the country and the wider region. It can make its mark as Asean Chair by advocating for cross-border data flows on behalf of the bloc. — Bloomberg
Kelvin Cen is the Head of South-East Asia at Bloomberg. He oversees 11 markets across the region, driving strategy and business development and strengthening the firm's key client relationships in the region. In his 14-year career with Bloomberg, Cen has held several leadership roles, including co-leading the APAC Corporations and Commodities business and, most recently, serving as the COO for Asia Pacific. The views expressed here are solely the writer's own.
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