Digital sovereignty isn’t the same thing as digital isolation. Asia’s governments should be careful

Asia-Pacific governments are increasingly asserting control over data produced by their citizens, businesses, and public bodies. Geopolitical uncertainty, the rise of AI, and worries over foreign tech dependence have convinced many regulators that data is a core national asset. And, as with physical items, they think the best way to secure that data is to keep it within their jurisdiction. But that belief is based on a flawed assumption: that sovereignty is defined by where a server physically sits, rather than by who controls access to the data. Regulators exercise digital sovereignty in many different ways. South Korea’s Cloud Security Assurance Program (CSAP) requires public agencies to procure cloud services that store data locally, use domestically developed encryption algorithms, and have management and operations personnel reside in Korea. Japan maintains a complex certification process for government software that is conducted almost exclusively in Japanese, which disadvantages non-Japanese providers. India’s Digital Personal Data Protection Act, enacted in 2023, permits the government to impose restrictions on cross-border data transfers to specific countries if the authorities provide appropriate notification. In Southeast Asia, Indonesia and Vietnam routinely propose sweeping data localization mandates. Even the Philippines, long considered by businesses and academics one of the region’s champions of free data flows, last year proposed legislation requiring public agencies (including universities) to keep nearly all data on domestic servers. The trickiness around how to regulate cross-border data flows was one hurdle to the signing of ASEAN’s Digital Economy Framework Agreement (DEFA), potentially the world’s first regional comprehensive digital trade pact. The DEFA will be signed at the next ASEAN Leaders’ Summit in November, a year later than planned. Secure cross-border data flows are a key ingredient for a successful DEFA. A watered-