Challenges and Opportunities in the Indo-Pacific Digital Economy

[As prepared]

Thank you, Todd, I’m delighted to be here.

And thank you, Under Secretary Krach, for beginning our conversation today by emphasizing the importance of trust in digital networks. This issue and other opportunities and challenges relating to the digital economy are critical to the Indo-Pacific region—and for USAID’s work there.

Though the Indo-Pacific is the world’s fastest-growing region for digital infrastructure, from storage to transmision, we know that there are many opportunities to improve access and affordability.

We are taking an active interest in how the digital economy will serve and shape the region.

We want it to serve the long-term interests of each of the nations that invest in it.

And we recognize that so much of the investment in the digital economy is yet to occur.

The Asian Development Bank estimates that developing nations in the region need to invest $2.3 trillion by 2030 in telecommunications alone just to keep up with current demand.

Within the Association of Southeast Asian Nations, between 40 and 50 percent of the population is not connected to the Internet. That represents a tremendous challenge.

And, USAID is calling on our experience and relationships in the region to build a comprehensive and effective strategy for digital investments.

We see the adoption and expansion of open, inclusive, and secure digital networks as a priority in our work to advance prosperity and promote resilient, democratic societies.

In fact, I just got back from a very productive trip yesterday with Under Secretary Krach where we focused specifically on this topic. I was in Estonia, Finland, and the United Arab Emirates talking to their leaders in government and the private sector about the critical importance of secure supply chains, telecommunications, and 5G. So many regions around the world have realized that digital security is key—and we welcome the Indo-Pacific with open arms as the region begins to join us in this transformation.

Consider the potential impact of 5G mobile networks. Think what these networks will mean for greater security and speed in multiple fields of endeavour, including the development of payments systems or for vital services like education and telemedicine.

Advanced digital infrastructure is a game-changer, and we want the Indo-Pacific region to benefit fully from it.

But for that to happen, we will need to move forward in a coherent and cooperative way.

That is one reason USAID launched our first-ever Digital Strategy back in April. We recognized the need for public-private cooperation and co-investment in the digital economy.

Part of our focus is on the gender digital divide. In too many places around the world, women don’t enjoy the same access to technology and the digital economy as men. And when they do have access, we need to ensure their safety and security.

As with everything else, when women have access and are empowered, they can put their skills and energy to use.

This has been an area of focus for USAID for quite some time. In fact, at this same forum last year, we announced the launch of our Digital Asia Accelerator based in Bangkok. These programs offer digital safety awareness and cybersecurity skills training throughout the region. We do not want to see digital haves and have-nots, and we want everyone to understand the rules of the road in the digital economy.

Governments and the private sector should work together on these issues. The more we involve civil society and private firms in security and accountability in digital networks, the better off economies will be.

We are also advocates for the American model of digital innovation.

That model favors openness, reliability, security, and constant improvement. It is not driven by the needs of any given government or state actor.

Of course, we recognize that there is competition in this regard. And—as Under Secretary Krach outlined a few minutes ago—it is important to address the attempts by the Chinese government to dominate the digital economy through 5G technology.

The Chinese effort is anchored by state-controlled entities. These entities are offering equipment and systems that the Chinese Communist Party ultimately controls.

If a nation anchors its 5G network with Chinese technology, they are, in effect, giving their citizens’ and governments’ over to tools of Beijing’s surveillance state.

It’s one of the many reasons President Trump is leading a global campaign to stop the spread of untrusted network equipment around the world.

But it’s not enough to say “don’t buy from China.” We have to offer our own approach—and we do.

For example, across the Pacific Islands, USAID is gearing up to expand access to secure digital infrastructure in places that are far from population centers and hard to reach. These include some of the remote atolls and islands that don’t currently have Internet access.

In 2020, there is no reason for these nations and islands to be cut off from the digital economy. With our help and that of our partners, these nations will be fully integrated and have the internet access that will help their people to thrive.

For instance, the Republic of Palau has expressed an aspiration to be connected to a second undersea fiber optic cable to ensure reliable, secure digital connectivity. We call this “fiber redundancy.”

Secretary of State Michael Pompeo announced the U.S. Government’s commitment, alongside Australia and Japan under the Trilateral Partnership for Infrastructure Development, to fund Palau’s need to build this new cable connection. USAID is pleased to be leading the U.S. Government's efforts to move this project forward—it will enable Palau to strengthen its digital connectivity and thus advance efforts to achieve integral economic and human development.

The global digital infrastructure is changing rapidly, and the pitfalls and opportunities it presents have never been more consequential. I am encouraged by the attention that friends and partners in the Indo-Pacific region and around the world are giving to this issue. Together, we can ensure the widespread, equitable, and safe proliferation of these vital new technologies.

I look forward to our discussion of these issues, and any questions you may have.

Thank you.