Jakarta. ASEAN is set to sign a pact that can double its digital economy next year, according to an Indonesian minister. However, the group’s soon-to-be member Timor-Leste will likely need more time to join the accord.

The Southeast Asian bloc began negotiating the so-called Digital Economy Framework Agreement (DEFA) in 2023, during which Jakarta was at the group’s helm. ASEAN claimed that this would become the world’s first major regionwide digital economy agreement. 

Chief Economic Affairs Minister Airlangga Hartarto revealed Tuesday that the group had been drafting some key provisions, including on making sure that the members comply with the World Trade Organization’s rule to keep cross-border digital trade free of customs duties. The DEFA will also cover financial services, non-discrimination principles for digital products, submarine cables, and flexibility in electronic payment systems.

“We hope we can sign the DEFA in 2026 and immediately implement the pact,” Airlangga told a news conference in Jakarta. 

Airlangga claimed that estimates showed that ASEAN’s “highly dynamic” internet economy could soar from $263 billion in 2024 to $1 trillion in 2030 under a business-as-usual scenario. Having the DEFA in place is expected to cause the 2030 projections to skyrocket to $2 trillion. According to Airlangga, Indonesia makes up the lion’s share of ASEAN’s internet economy, contributing about $90 billion in 2024 and is bound to top $360 billion by 2030.

What About Timor-Leste?
ASEAN leaders are expected to gather in Kuala Lumpur later this month for the group’s summit. The forum will finally see Timor-Leste gaining its full membership -- something which the half-island nation had pursued for decades. The Jakarta Globe asked Airlangga whether newcomer Dili would automatically join the DEFA when it gets signed in 2026. The minister admitted that it would be unlikely for Dili to be part of the pact by next year.

“We will give Timor-Leste some time to adjust its regulations. … So, no, not [2026],” Airlangga commented on Dili’s DEFA entry.

Timor-Leste officially applied to join ASEAN in 2011, but it was only in 2022 that the group “agreed in principle” to accept Dili. Stark inequality and lackluster infrastructure have set major obstacles to Timor-Leste’s ASEAN dream.  

“As Timor Leste becomes [the group’s] 11th member, we hope to bring our cry for unity in ASEAN, for an ASEAN that embraces everyone and not leaves anyone behind,” its president, José Ramos-Horta, recently told the ASEAN for the Peoples Conference.

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