东盟数字乡村物流框架（含区域跨境冷链通道建设规划）

FINALREPORT|ii

ProjectProfile

ProjectTitle:

ASEANFrameworkonLogisticforDigitalEconomySupplyChainforRuralArea

ProjectDescription:

TheASEANDigitalIntegrationIndex(ADII)revealsasignificantdigitaldividewithinASEAN,

particularlybetweenurbanandruralareas,highlightingtheregion'slagindigitaltradeand

logisticscomparedtopartnercountries.Tobridgethisgapandenhanceruralareas'

contributiontothedigitaleconomy,there'sacallforaframeworktodevelopdigitallogisticsinfrastructureacrossASEAN,focusingoninclusivesupportforallgeographicareasandlevelsofsociety,especiallyinruralregions.

ExecutingAgency:

CentreofInternationalAffairs–SecretariatGeneral,MinistryofCommunicationand

InformationTechnology,RepublicofIndonesiaGedungA,Lantai4–MinistryofCommunicationandInformationTechnology

EA’saddress:

Jl.MedanMerdekaBarat,no.9.Jakarta10110Telp:+62-21-3848104,Fax:+62-21-3500959

FundingTotal:

62,270USD

FundingSource:

ASEANICTFunds

DurationofProject:

11months

ProjectImplementationUnit:

ResearchCenterforRegionalPlanningandDevelopment,UniversitasGadjahMada,Yogyakarta

PIUAddress:

JalanKemuningSekipM-2,KampusUGM,Yogyakarta,Indonesia5528Phone:+62274566361.

Fax:+62274562800.

Email:

psppr@ugm.ac.id

TableofContents

FINALREPORT|iii

Chapter1Introduction 1

1.1Background 1

1.2Rationale/Purpose 1

1.3Objectives 2

1.4Output 2

1.5Outcome 2

Chapter2DeskStudyonLast-mileDeliveryandRuralLogistics 3

2.1DigitalEconomyandSupplyChain 3

2.2Last-mileDelivery:Trendsandchallenges 7

2.3RuralDevelopmentandIssuesofGrowth 8

2.4RuralLogistics 10

Chapter3RegionalPolicyFormulationfortheDigitalEconomySupplyChainforRuralAreas 12

3.1ASEANMemberStatesCommitmentforRuralMSMEsEmpowermentinDigitalEconomy

SupplyChaininRuralAreas:PolicyAnalysis 12

3.1.1BruneiDarussalam 13

3.1.2Cambodia 14

3.1.3Indonesia 15

3.1.4LaoDPR 15

3.1.5Malaysia 16

3.1.6Myanmar 17

3.1.7Philippines 18

3.1.8Singapore 19

3.1.9Thailand 20

3.1.10Vietnam 21

3.2Cross-CuttingThemes:InitiativesandChallengesonDigitalization 22

3.3QuestionnaireFindings 25

3.3.1BruneiDarussalam 25

3.3.2Cambodia 26

3.3.3Indonesia 27

3.3.4Malaysia 28

3.3.5Singapore 29

3.3.6Thailand 30

3.3.7Vietnam 31

3.4FindingsandResultsfromtheRegionalWorkshop 32

3.4.1SMEsandDigitalTradeandEconomyinASEAN 32

3.4.2ChallengesandOpportunities 32

3.5Discussions 33

Chapter4ASEANFRAMEWORKONLOGISTICSFORDIGITALECONOMYSUPPLYCHAININRURALAREA.33

4.1Introduction 33

4.2OperationalGuidelines 34

4.2.1Terminology 34

4.2.2PrinciplesofImplementation 35

4.3FrameworkDevelopmentProcess 35

4.4FrameworkforDigitalEconomySupplyChainforRuralArea 35

4.4.2PillarsonLogisticsforDigitalEconomySupplyChainforRuralArea 37

PillarofDataGovernance 37

PillaronLogistics 38

PillaronEconomicDevelopment 38

PillaronDigitalCulture 38

4.5TheimplementationoftheFramework 39

References 45

FINALREPORT|iv

ListofFigures

Figure1TransitionofLogisticsOverTime 6

Figure2EvolutionofSupplyChainIntoValueWebs 7

Figure3PillarsoftheFramework 36

Figure4ASEANFrameworkonDigitalEconomySupplyChainForRuralAreas 36

ListofTables

Table1SelectedAMSrankinginWorld’sPerformanceLogisticIndex,2023 11

Table2BreakdownofspecificimplementationstrategiesoftheFrameworkforeachASEANmemberstate 40

FINALREPORT|1

Chapter1Introduction

1.1Background

DigitaldividesinASEANmemberMemberstatesStates(AMSs)varyacrossstateswiththedevelopedSingapore,MalaysiaandBruneihaveinternetaccessibilityratesofmorethan80percent,whileIndonesiaandThailandhavelessthan60percentalongwithimpoverishedMyanmarandVietnam.ThiscreatesdifferenteconomicimpactamongtheAMSseconomy,wherethebulkofe-commerceiscarriedoutthroughinternetinfrastructure.LackofinfrastructureinruralareascreatesimpedimenttoenhancingthelocaleconomyasruralSMEshavedifficultiesexpandingtheirscaleofproductionandreachingouttobroadermarket.Moreover,the2021ASEANDigitalIntegrationIndex(ADII)onlyscores55.27ondigitaltrade&logistics;thisisthelowestamongthefivepillarsofADII.Thepertinentissueisthelackofsupportofdigitaltechnologiesontrade/customsprocessesinmanyAMSs.

Expandingthereachofruralsmall&mediumenterprises(SMEs)andbusinessestobroadersupply(ofinputs)andmarketwouldaccelerateruraleconomicgrowth,createjobsandextendthevalueaddedofgoodsproducedandsoldoutsidetheruralareas.WhileruralSMEsinnovationandthecapacitytorapidlyadapttoconsumerdemandareofimportanceingeneratingruralcompetitiveness,neverthelessaccesstobroadermarket(bothfinancialmarketsandconsumers)shouldbeprioritized.Hence,thenecessitytodevelopaframeworkfordigitalsupplychainforruralareasthatcanbeappliedtoeachAMSandoverallASEANregion.

1.2Rationale/Purpose

TranslatinganaloguesupplychaintointelligentsupplychainrequirescoordinatedeffortsandpolicyharmonizationbetweenAMSs.Whiletheintentofthisprojectistoescalateruralareas’competitivenessandalleviatebarriersofdataflowstoenhanceintelligentsupplychain(first-mile,middle-mileandlast-miledelivery),severalbarriersareremaintobeseen.DigitaldividestillexistsbetweenurbanandruralareasandbetweenAMSs,asdegreeofinternetpenetrationvariesineachAMS;atthesametime,ruraleconomyrelianceonlocalcustomsandculturepluslackofnecessaryinformationbeyondtheconfineofruralareasimpedesruralcompetitivenesswhichproducesandwidensrural-urbaneconomicgap.AsnineAMSshaveruralareaswitheachcomplexityandchallenges,enhancingtheregionalsupplychainandexpandingdigitaltradewouldfacilitateregionaleconomicgrowthanddevelopment.ThisfacilitateseffortstoachieveMasterPlanonConnectivity2025(MPAC2025)’strategicareaonSeamlessLogisticsthroughkey

FINALREPORT|2

initiative:A3.2.strengtheningASEANcompetitivenessthroughenhancedtraderoutesandlogistics.

ExpandingtheindustrialchainofruralcommoditieswouldcreatejobopportunitiesandaddedvaluetoruralSMEs.However,thisalonewouldnotgeneratesignificantimpactonruralenterprises’performanceunlessbroadermarketcanbereachedbothwithinstateandcrossborder.ByenhancingruralSMEsandeconomictransformationthroughICTfacilitationwillleadtohighereconomicanddevelopmentoutcomesandreductionofwealthandincomegapsregionallyandlocally.Todoso,regulatoryframeworkdevelopmentandharmonizationshouldbeputintoplace,allowingbetterandspeedytransitionfromanaloguetointelligentsupplychainandtheintegrationofAMSsintoregionaldigitaltradeandeconomy.Assuch,thisprojectsupportsASEANEconomicBluePrint2025(AECBP2025)especiallyC2.iii)innovation:supportICTinnovationsandentrepreneurshipaswellasnewtechnologicaldevelopmentssuchassmartcityandbigdataanalytics.

1.3Objectives

(i)Identificationofexistinglawsandregulationsonlogisticsthatcouldbedeployedtoacceleratetheimplementationofdigitaleconomysupplychaininruralareas.

(ii)Analysisofopportunitiesandchallengesintheaccelerationofdigitaleconomysupplychainforruralareas,includingviewsandperceptionsfromlogisticsoperatorsandSMEs.

(iii)Harmonizationofregulationsonlogisticstosupportdigitaleconomysupplychaininrural

areas.

1.4Output

ASEANFrameworkonlogisticsfordigitaleconomysupplychainforruralareaswhichconsistsoftheproposedagreementonharmonizationofregulationsonthefollowingaspects(logistics,supplychain,SMEs,anddigitaleconomy),specificcommitmentsfromeachAMSsandnon-bindingarrangementstoenhancetheapplicationofdigitaleconomysupplychainforruralareas.

1.5Outcome

immediateoutcome:Relevantsectoralbodies(ASEANDigitalSeniorOfficialsMeeting(ADGSOM)fromdigitalsector,ASEANSeniorTransportOfficialMeeting(STOM)fromtransportationsector,ASEANCoordinatingCommitteeonMicro,SmallandMediumEnterprises(ACCMSME)fromsectorMSMEtoconsider,endorse,andadopttherecommendations.

FINALREPORT|3

mediumtermoutcome:EachAMSimplementtheadoptedtherecommendationsasregulationstoacceleratetheintegrationofruralSMEsintoglobalsupplychainfacilitatedbydigitaleconomy.

Chapter2DeskStudyonLast-mileDeliveryandRuralLogistics

Thischapteroutlinesmethodstoidentifywhatappropriateapproachesfordevelopingpolicyframeworkforthedigitaleconomysupplychainforruralarea.Itstartsbyidentifyingwhatdigitaleconomyandsupplychainareandtheintersectionbetweenthetwowhichwhichleadstotheimplementationoflast-miledelivery.Debatesanddiscussionsfromtheoreticalandempiricalresearchareusedasaframeworktodefinedigitaleconomyanditseffectonsupplychainoperationsincludinglast-miledelivery.Statisticaldataandreportsareemployedtosupporttheargumentofwherethecurrenttrendondigitaleconomysupplychainis,includingimplementationchallengesinruralarea.

Onemajorissueinrurallast-miledistributionisitscapillary,wheretherearelongdistancesbetweendeliverypointsandtheyareoftendifficulttoaccessduetounreliableinfrastructurethatcancausedelays.Culturalandinstitutionalarrangementalsoplayimportantrolesinallowingruraleconomytogrow,asitaffectslocalcommunityacceptanceorresistanceinutilisingnewtechnologyorapplicationfortheirdailyactivities(includingbusinessactivities).Againstthisbackground,itisimportanttomapoutwhatisneededtobedoneforacceleratingruraleconomy.Thissectionprovidesdescriptionofwhatdigitaleconomysupplychainisandhowthistrendevolveovertimeandreshapeourthinkinginrunningbusinessandexpandmarketsize.Itthendelvesintolatesttrendonlast-miledeliveryandhurdlesinfacilitatingruralSMEsgrowththroughmarketexpansion,aprerequisiteinfosteringruraleconomy.SuchimpedimentsarethenanalyzedwithinthecontextofruraldevelopmentandhowthiscanbesolvedthroughadvancingrurallogisticsandseamlesslyembeddingruralSMEsintodigitaleconomysupplychain.Allofthesewillbeutilizedasaconceptualprecursorforthepolicyframeworkforthedigitaleconomysupplychainforruralarea.

2.1DigitalEconomyandSupplyChain

Technologicaladvancementhaspavedwayforthegrowthofnewlinesofeconomicactivitieswhichheraldshigheraddedvalueandeconomicbenefitstobusinessesandconsumers.Digitaleconomyemergesasthenewapproachthatcouldincreaseeconomicvalueofgoodssold(andservicesprovided)byenterprises.Latestestimatesshowthatin2023digitallytransformedenterprisesaccountforUS$53.3trillion,morethanhalfoftheoverallnominalGDPandsharp

FINALREPORT|4

increasefromlatestaccountin2018whereitaccountedforonlyUS$13.5trillion.Thedigitaleconomymakesupmorethan15%oftheglobalGDPandhasgrown2.5timesfasterbetween2013and2023thantheGDPofthephysicalworld.Itisforecastthatthedigitaleconomywillgrowtremendouslyandcontributenotonly30%totheglobalGDPbutalsocreate30millionjobsby2030.

Businesseshaveexpressedconcernoverwhethertechnologycouldfacilitatebetterinteractionbetweenfirmsorbetweenproducers,intermediateplayersandconsumers.Timeconstraintsandbusinesseslackofabilitytoidentifymarketfortheirproductsareoftencitedasthemajorimpedimentforsmallandmediumenterprises(SMEs)forgrowth.WhileprogressonICTdevelopmentandrateofadoptionbyenterprisesgrowsfaster,changesinbehaviourandbusinessmodelarestillrequiredtofullycapitalizeonthepotentialsofICTinfrastructureanddigitaleconomy.Developedeconomiesenjoyhighereconomicgrowthbenefitsbyafactorofalmost25percent,althoughtheytendtolagbehindemergingeconomiesinjobcreationbyasimilarmargin.Thisillustratesthepotentialofdigitaleconomytolevelingplayingfieldintheglobalizedeconomy.

TheASEANDigitalMasterPlan(ADMP)2025hasoutlinedstepsforenhancingtheregionalsupplychainbyfocusingontheaspectssuchasstrengtheningdatagovernanceandsecurityandadoptionofdigitalservicestoincreaseregionalcompetitivenessandeconomicgrowth.Toachievethesegoals,severaldesiredoutcomesandenablingactionsweredevelopedandtranslatedintoannualprojectscarriedoutbyinstitutionresponsibleforcarryingoutICTdevelopmentineachAMS.TheseprojectsaredirectedtoalleviatedigitaldividenotonlybetweenAMSsbutalsowithineachAMSasrural-urbandividecontinuestopersistalthoughithaslessenedovertheyears.

OneofitsdesiredoutcomeoftheADMP2025focusesontheutilisationofdigitalservicestoconnectbusinessandtofacilitatecross-bordertrade.WithcurrentGDPofapproximatelyUS$3.7trillionandover670millionpeopleinpopulationsize,ItisestimatedthatASEANasaneconomicblocby2030willhavecombinedGDPreachestrillionsofdollarsandbecomeworld’sfourth-largesteconomy.Assuch,tofullycapturethispotential,itisimportanttomobiliseeffortstostrengtheneachAMScapacitytoparticipateinthedigitaleconomy,bolsterenterprisesinvolvementthroughinfrastructuredevelopment&incentivepolicyandsafeguardconsumers’privacyviadatagovernanceandsecurity.

UndertheDO6,theADMP2025alsooutlinesanumberofenablingactions(EAs)tohelprealizeconnectingbusinessandfacilitatecross-bordertradethroughutilisationofdigital

FINALREPORT|5

servicesofwhichoneoftheseEAsispromotionofe-commercetradeinASEAN,enhancelast-milefulfilmentcooperation,andimprovecompetitivenessinthedigitaleconomy.UnderthisEA,supplychainpreviouslyconnectsproducerandconsumerthroughmechanizationoftransportfollowedbyautomationofhandlingsystemnowisexpectedtoadoptsystemoflogisticsmanagementwhereeveryinformationiscompiledandsharedtoreducetimeandcostassociatedwithfreightmobility.Thislogistics3.0approachisexpectedtobringsignificantimprovementandchangesinenterprisesbehaviour.Thistransformationallowsenterprisesandconsumerstofullyadapttologistics4.0,whereeverythingisautomatedandnetworked,allowingpromptresponsesfromplayers(bothenterprisesandfreightcompanies)andconsumers.

DespitecurrentpracticesoflogisticsandsupplychaininseveralAMSsstillemploymechanizationoftransportandgraduallyembraceautomationofhandlingsystem,somepracticesinitiatedbyprivatesectorshowthatthetrendhastiltedtowardsystemoflogisticsmanagement.Thisparadigmshiftallowsincreasedeaseoffreightmobilityandpenetrationofbroadermarketbyenterprises,althoughforthoseinruralareasthisisconstrainedbylackofcapacity(ofenterprises)tocapitalizedigitaleconomysupplychainandengagewithcurrenttechnology.TheASEANSmartLogisticsNetwork(ASLN)asaplatformtopromotelogisticsinterconnectivityandintegrationwithintheregionalblocisbuilttoimprovingconnectivityandpromotingtheuseofsmartandsustainablelogisticsinfrastructure.ThisinitiativeistheresultoftheASEANConnectivityMasterPlan(ACMP)2025whichcallsforpolicypromotingintegrationbetweenASEANmembers.

FINALREPORT|6

Figure1TransitionofLogisticsOverTime

Source:Wang,2016

Asseenfromfigure1,logistics4.0asthegoalofdigitaleconomysupplychainfocusesonconnectingmultiplesupplychains.Thisnewparadigmwilldeployinternetnetworkstofacilitatecommunicationbetweenandamongvarioussubsystemsofactivitiesanddataexchangeinrealtimeeffectivelyandefficiently.Suchanapproachwillbecarriedouttodeliver‘smartservices’and“smartproducts”.Whileitseemspromising,neverthelesstherearebarrierstofullyimplementingadvancedsupplychainapproachinruralareasdespitepolicysupportfromgovernment.

FINALREPORT|7

Figure2EvolutionofSupplyChainIntoValueWebs

Source:Deloitteanalysis.

Aspreviouslystated,sinceASEANregionalisforecasttobetheworld’sfourth-largesteconomy,itisimportanttoadapttothenewtrendandtechnology.Currentpracticesoflinearsupplychainfocusingonthecreationofvaluebasedontheproductionofgoodsandserviceswillbereplacedwithcomplex,dynamicandconnectedvaluewebswherevalueisproducedthroughknowledgeexchangethatdrivesproactiveproductionofgoodsandservices.

2.2Last-mileDelivery:Trendsandchallenges

Keyfeaturesofdigitaleconomyistheimplementationoflast-miledeliverywhichcutthedistancebetweenseller(s)/producer(s)and(potential)buyer(s).Thereduceddistancebetweenseller(s)andbuyer(s)isfacilitatedthroughtheutilisationofICTwhichenablesgoodsdeliveredintimelymannerandbothsellerandbuyercouldkeeptrackoftheirgoodsinrealtime.Thisfacilitatesincreasedtrustbetweensellerandbuyerleadingtopotentiallyincreasedvolumesalesovertime(Amoah

et.al.2023

;Beckmann

et.al.2023

;Peters,2023).thisincreasedsalesvolumealsofacilitatessellertocontinuouslyupgradetheirsystemallowingbetterservicesandfastertimedeliveryofgoodsand/orservicestoconsumers.

Facilitatedbyincreasedspeedofinternetconnection,e-commerceenablesbuyer(s)todirectlypurchasegoodsandservicesfromseller(s).alongwiththegrowthofparcelexpress

FINALREPORT|8

industry,e-commercehasshortenedtheintervalsalongthesupplychain.Althoughtherearesomechallengesinexpandinginternetconnectioninruralareas,neverthelessinternethasreachedalmosteveryvillageallowingsignificantreductioninsupplyintermediationandincreasedopportunitiesofvillagestokeepmoreofthesalesproceedsasincome.

Last-miledeliveryprovidessignificantfinancialandeconomicbenefitsforurbandwellersandbusinesseslocatedinurbanareas;however,challengesarestillpresentfortheruralbusinessestooptimallydeployICTtoreapthefullbenefitsoflast-miledelivery(Mrazek

et.al

.2020;Miao2021;

Jinget.al.2023

).oneoftheproblemsinimplementinglast-miledeliveryinruralareaisthelongdistancebetweentwopointsleadingtosignificantincreaseoftransportcost.Geographicalcharacteristicsalsoaffectstheoperationoflast-miledelivery,asitrequiresspecializedvehicletotransportgoodsfromoneplacetoanother.Althoughbothsellerandbuyercouldkeeptrackofwheretheirgoodsare,neverthelessthediversityofgeographicalconstraintsbecomestheimpedimentthatcouldnotbeeasilysolved.

e-commercesupply-chainmanagementmakesextensiveuseofenterprise-resource-planningsystems,integratingnearlyallaspectsofmanagementtostandardizethefirm’sbasicinformationandbusinessprocesses.Althoughitshowspromises,someissuesremaintobeseen,especiallyasAMSsuchasIndonesia,Malaysia,PhilippinesarearchipelagicstatewhichmakescostoftransportinggoodswithinregionishighercomparedtootherAMSwhichexhibitcontinentalsettingsuchasBruneiDarussalam,Cambodia,Laos,Myanmar,Thailand,andVietnam.

However,tofullyrealizethepotentialsoflast-miledeliverysomeobstaclesneedtobeaddressed.Logisticscosts,roadconstructionandinfrastructureplanning,andlackoftechnologyintegrationareseenastheprimaryculpritfortheregioninlaggingintappingthefullpotentialoflast-miledelivery.LogisticscostsinVietnamwereequivalentto20.9percentofGDPin2016,surpassedthanthoseofChina,ThailandandJapan.Thiswastheresultfromunorganizedoperationsduetolackoftechnology.Further,severalAMSsstillusetraditionalrouteplanningthatinclidesredundantprocedures.Thebusinessmodelemployunnecessarilyhighamountsofresourcesthatinducemorecostsforcompanies.DriversincertainASEANregionsarestillstrugglingtodelivergoodsandservicestopre-determinedlocationspromptlyandaccurately.Theyoftenrelyontheirfamiliaritywiththelocalareaandrefusetoutilizethehelpoftechnologyandtendtotakelongerroutes.

2.3RuralDevelopmentandIssuesofGrowth

FINALREPORT|9

DespitethefactthatthenumberofSoutheastAsiapopulationlivesinurbanareascontinuestoincrease,roughly60percentofthepopulationstillliveinruralareas.Withagricultureasthepredominantsector,itischallengingforruralpopulationtostimulatethelocaleconomyduetoanumberoffactors(Beckmann

et.al.2023

;Pfister&Lehrmann2023;Quinton

et.al.2023

).

AlthoughotherdevelopedcountriessuchasJapan,SouthKoreaandtosomeextentChinaexhibittraitsofpredominantagricultureintheirruralareas,thesizeoftheirruraleconomyeclipsesruralASEAN.Japan,forexample,hasdevelopedadvancedlogisticssystemtofacilitateandtransportgoodsbetweenruralandurbanareasandvice-versaduetotheirabilitytobuildinterconnectinginfrastructurefromoneregiontoanother(Miao2023;Quinton

et.al.2023

).TheextentofurbangrowthinruralChinahasfacilitatedremarkableruraldevelopmentandacceleratedruralSMEscapacitytoexpandtobroadermarket(Miao2023;Peters2023;Pfister&Lehrmann2023).WiththeexceptionofJapanasanarchipelagiccountry,developedcountrieshavematurelogisticssystemduetotheirgeographicalsettingallowingfreights’easeofmovementandassuchthisleadstolowercostthatbenefitsellerandbuyer.

AlthoughruralareasinASEANshowsomeimprovement,neverthelesssomeissuesremaininplace.Economicgrowthstagnates,especiallyafterCOVID19-pandemicwhichimpedesnotonlytradeandservicesinurbanareas,butagricultureandhome-industryinruralareasaswell.ThisdisruptionallowsdeeperpenetrationofICTinruralareas,whichinsomecasesacceleratesculturaltransformation.Ruralcommunity,especiallythoseliveadjacenttourbanareasormajorcities,arenolongerdependentonanaloginstrumentsindoingtheirbusinessandgraduallyshiftingtodigitalapps(Peters2023).

Despitenumerouseffortsbycentralgovernmenttoaccelerateeconomicgrowthandintegrateruralareasintowidereconomy,neverthelessthereareshortcomingsthataredifficulttoaddress.LowpopulationgrowthduetohighoutmigrationratecontinuestoimpedetheabilityofruralSMEstoexpandtheirbusinessesasdemandremainsmodest.AlthoughtheICTcouldfacilitateruralSMEstoidentifypotentialmarketfortheirproducts,lackofadaptableinfrastructurecontinuestoimpedethissolution.Downstreamingpolicyalsoremainstobeseen,assomeruralcommunitiesareremainsresistantinadoptingnewtechnologyand/orequipmentthatcouldbedeployedtoincreasetheireconomiesofscale.Somesuggestionstoovercomethisissueinvolveutilizingcommunitydeliverypointsandspecializedvehicle.Communitydeliverypointsareaviablesolutionwheredistancebetweensettlementinagivenregionismoderateenoughthatthesecanbereachedbysmallmotorisedvehicleorspecializedvehicle.

Ruralcommunitypurchasingpowerisalsoseenasachallengingissueinacceleratingeconomicgrowth.Lackoflinkageamongruralareasorbetweenruralandurbanareasimpede

FINALREPORT|10

flowsofgoodsleavingruralSMEsunabletotapintolargermarket.Effortstodownstreamruralagriculturalproductsareconstrainedbylackofskills,especiallyskillsofruralyouth,requiredtodiversifytheproductsandincreasetheiraddedvalue.IncreasedutilisationofICTshouldbetailoredwithbehavioralandculturalchangesofespeciallyruralyouthtoovercometheseproblems.GovernmentcanpromoteICTinfrastructuredevelopmentinruralareasandatthesametimemodifyeducationalcurriculatohelpruralyouthacquirenecessaryskills.

Aligningeffortstoincreaseruralincomewithdigitaleconomycouldalleviateproblemsoflinkingruralpotentialstourbanand/orwidermarket.ICTinfrastructuredevelopmentcouldbeexpeditedthroughdirectinvestmentwithcreativefinancingscheme(suchaspublic-privatepartnerships/PPPs)orpromotionofincentivesforcompetitivetendering.Moreover,governmentcoulddevelopasoundpolicyframeworkthatreflectstheneedforawiderdiffusionofdigitalnetworks.Anothermechanismissupportforbottom-upmodelsinruralareastofinanceanddeployhigh-speednetworkswheremunicipalnetworksorhigh-speednetworksfullyorpartiallyfacilitatedorfinancedbylocalgovernments,providedthatlocalgovernment’sfiscalcapacityissufficienttocoverallexpenditurerelatedtothisenterprise.

Whilealltheseseempromising,neverthelesslocalinstitutionalcapacity,includingruralgovernmentandlocalcommunity,shouldalsobestrengthenedtoensurethateffortstoaccelerateruraleconomicgrowthwillhavelastingimpacts.Thesecanberealizedthroughintroducingnewtechnologiesandapplicationtoimproveruralenterprises’performance,enactingpolicyandregulationstoincreaselocalgovernmentinruralareastoadoptICTintheirbusinessesanddevelopingdigitalplatformtofacilitatesocialinclusionbetweenandamongruralcommunitymembers.

2.4RuralLogistics

Keyissuesandchallengesinstimulatingruraleconomyisitsinabilitytomarkettheeconomicoutputsoutsideitsboundaries.Unlikeurbanareaswhichexperiencehigherpopulationgrowthduetoamixofnaturalgrowthandhighin-migrationrate,ruralpopulationonlyexperiencesmodestgrowthduetonaturalgrowthbutthisismoderatedbyhighout-migrationrate.Thislowpopulationgrowthrate,combinedwithlowpurchasingpower,attributedtolackofdemandfromruralareaswhichinturnhamperedruralSMEsabilitytogrowandexpandtheirbusiness.

TofacilitateruralSMEsgrowthandtheirbusinessexp