Mitigating Cybersecurity Risks for ASEAN Smart Cities

By Kim Mai Tran & Andreyka Natalegawa —

Bangkok, Thailand. As cities of Southeast Asia expand their connectivity, cybersecurity risks will grow. Source: Robert.Trombetta’s flickr photostream, used under a creative commons license.

In recent years, urban centers have become a focal point of development in ASEAN member states. With over 40 percent of Southeast Asia’s population based in cities, leaders from across the region have pushed to develop their cities to become safer and smarter. The challenges faced by Southeast Asian countries in their quest to modernize their urban centers are formidable – policymakers must take care to promote a form of Smart Cities development that is not only equitable and inclusive but insulates cities from threats to their overall cybersecurity.

The urgent demand for modernization and digitization in  ASEAN urban centers is reflected in a slew of recent policy pronouncements from across the region, including the U.S.-ASEAN Smart Cities Partnership and similar announcements of support from Japan and Australia. These initiatives build on momentum generated by the ASEAN Smart Cities Network, an initiative announced in 2018 during Singapore’s ASEAN Chairmanship intended to provide a collaborative platform for the ASEAN member states to work towards smart and sustainable urban development.

These initiatives have correctly identified a critical opportunity – though the majority of Southeast Asia remains less urbanized than the global average, urbanization rates will see a boom in coming years. By 2030, mid-sized cities of between 200,000 and 2 million residents are forecast to drive 40 percent of the region’s growth. Findings from the McKinsey Global Institute estimate that Smart Cities development in Southeast Asia could lower greenhouse gas emissions by 260-270 kilotons, create between 1.2-1.5 million new jobs, and save the equivalent of up to 6 million years in commuting time.

The drive to establish Smart Cities, referring specifically to the development of cities that harness technological solutions to integrate master planning and urban governance into planning, could also greatly enhance the capabilities of local law enforcement in anticipating, monitoring, and combating crime. The digitization of key government functions could improve the efficacy of local governments, facilitate business-friendly practices, and increase access to social services.

ASEAN Smart Cities have the potential to provide citizens and businesses with unprecedented economic opportunities by improving overall quality of life, reshaping supply chains, and managing assets and resources more efficiently. These developments will be contingent on continued growth in the technological capacities of ASEAN member states, including the adoption of 5G networks. Increased reliance on the Internet of Things and web connectivity for critical urban services places Southeast Asia squarely in the center of a global competition to launch 5G networks, and presents unprecedented cybersecurity risks and data governance issues that many ASEAN cities are not prepared to address.

These risks include network stability, global network division, real-time communications vulnerability, and extra-territorial censorship, among others.

The tremendous quantity of web-connected devices and critical data transferred over 5G networks as a result of Smart Cities development will increase the risk of external actors compromising and exploiting insecure devices for malicious purposes, putting personal, financial, and government data in jeopardy.

The United States, China, South Korea, Japan, and the EU are leading the global race to roll out the next generation of networks this year, with China effectively putting in the most effort for the development and deployment of 5G networks in Southeast Asia. ASEAN members are already either shopping for readily available 5G networks or planning on developing their own. Thailand and the Philippines are considering teaming up with two Chinese information and communications technology (ICT) champions, Huawei and ZTE, to roll out 5G networks testbeds despite concerns over cybersecurity risks. Huawei, which now claims to have over 40,000 5G stations across Europe, Asia, and the Middle East, started its first 5G network tests in Thailand –where it established its regional headquarters. Trials testing driverless cars and remotely operated robots have already started in Chonburi, a region at the heart of Thailand’s Eastern Economic Corridor. Malaysia’s Maxis is collaborating with Huawei to accelerate the rollout of 5G technology. The Chinese tech giant inked a deal with the government of Cambodia to roll out 5G mobile infrastructure and has also showed confidence in winning 5G deals in Vietnam.

There is an increasing chance that two 5G networks will develop in the region — one conforming with U.S.-crafted norms and standards and one led by China — with ASEAN Smart Cities at the center of this competition and serving as testbeds for new 5G technology. China has a head start in applications and is using Southeast Asia as a build out of its domestic 5G ecosystem, offering a cheaper and more readily available technology despite a U.S. advantage in innovation capacity in terms of technological development.

Internally, ASEAN countries are designing their own cyber governance models inspired by China’s cyber model that are often antithetical to that of the United States and a free and open Internet. Recent examples of restrictive Internet governance models include Vietnam’s cyberlaw and Thailand’s Cybersecurity Act, wherein data localization and the capacity for Internet censorship play an integral role.

Washington’s focus on Smart Cities in Southeast Asia has been lacking considering the attraction of the Chinese cyber model, the political impact of Chinese investment in the digital economy, and the significant opportunity cost U.S. companies could incur.

In many ASEAN Smart Cities projects, geopolitics is likely to play an important role in decision making with regards to technology partnerships. Despite China’s cyber model gaining traction and the U.S. model increasingly being questioned, leaders in Southeast Asia are actively considering their options. Southeast Asian Smart Cities are looking for affordable, innovative technology solutions that will protect them from cybersecurity risks. How U.S. ICT companies engage with these leaders, and how the U.S. government facilitates this process, is likely to set major precedent in setting norms and standards in the region.

Ms. Kim Mai Tran is a Research Associate with the Southeast Asia Program at CSIS.

Mr. Andreyka Natalegawa is Program Coordinator and Research Assistant with the CSIS Southeast Asia Program.


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