DEFA and the Test of Indonesia’s Digital Leadership

The signing of the ASEAN Digital Economy Framework Agreement (DEFA) in Manila on November 14, 2026, opens an important new chapter in Southeast Asia’s economic integration. Expected to enter into force in early 2027, the agreement offers opportunities to strengthen digital trade and transactions across borders. For Indonesia, the central question is how this agreement can raise business incomes, expand employment opportunities, and strengthen national competitiveness.

Indonesia has reason to view this achievement with both pride and responsibility. DEFA negotiations were launched in Jakarta on September 3, 2023, during Indonesia’s ASEAN chairmanship. That momentum continued through to its signing under President Prabowo Subianto’s administration. This continuity demonstrates the importance of sustaining national priorities across administrations, with economic diplomacy creating greater opportunities for growth.

Yet diplomatic success must translate into readiness at home. In my view, the real test of Indonesia’s digital leadership begins when regional commitments must work in the daily lives of citizens and businesses.

Imagine a small business in Pekalongan receiving an order from a customer in another ASEAN country. Having a presence on a digital platform is only the first step. The business must still receive payment, ensure its trade documents are accepted, calculate shipping costs, understand its obligations, and handle customer complaints. The regional market becomes truly accessible when this entire process is straightforward, secure, and affordable.

DEFA’s benefits should therefore be measured by the barriers removed throughout that transaction. How quickly does payment arrive? How many times must the same information be submitted? How reliably do goods reach the buyer? Can a small business access a fair dispute resolution process? These practical questions will determine whether digital integration delivers tangible benefits.

A study cited by the government estimates that comprehensive DEFA implementation could increase the potential value of ASEAN’s digital economy in 2030 from approximately US$1 trillion to US$2 trillion. This is a conditional opportunity, not an outcome automatically secured by signing the agreement. Indonesia’s share of the benefits will depend on its productivity, technological capabilities, and business readiness.

I see three priorities requiring immediate attention.

First, build connectivity across the entire service chain. Digital payments must work alongside electronic documents, authentication, customs, and logistics. Indonesia needs to strengthen the principle of submitting information once: verified information should be reusable, lawfully, by authorized services. Implementation must include access restrictions, clear accountability, and mechanisms to correct errors.

Second, enable micro, small, and medium-sized enterprises (MSMEs) to participate actively in regional integration. Digital marketing training must be followed by practical support for actual transactions: selecting markets, meeting product standards, calculating margins after logistics costs, protecting brands, and maintaining customer relationships. The Indonesian Chamber of Commerce and Industry (KADIN) can connect government, business associations, technology providers, financial institutions, and logistics companies. The success of such support should be reflected in repeat sales and stronger businesses.

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Third, strengthen trust and national capabilities. Data exchange requires credible safeguards. Businesses need clarity about how data is used, how incidents are handled, and who is accountable. At the same time, Indonesian technology companies and professionals must have opportunities to provide solutions for the regional market. Integration should expand our capacity to create added value.

As an initial step, the government and KADIN could establish several cross-border digital trade pilots in sectors with businesses ready to participate. Each pilot should have an accountable lead, a clear timeline, and measurable outcomes: transaction costs, delivery times, the number of repeated data submissions, and sales growth. The barriers identified should then inform policy improvements.

DEFA gives Indonesia an opportunity to connect the strength of its domestic market with opportunities across Southeast Asia. Our leadership will be judged by our ability to turn an agreement into functioning services and growing businesses. When small businesses can fulfil regional orders more easily and earn a fair profit, digital diplomacy will have delivered meaningful benefits to society.