Equal access to digital infrastructure critical for Indonesia’s digital economy to flourish

Equal access to digital infrastructure critical for Indonesia’s digital economy to flourish

Indonesia’s digital economy would triple from US$40 billion to US$133 billion by 2025.

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An equal distribution of digital infrastructure is necessary before Indonesia can fully realise the potential of the digital economy, said Sri Mulyani Indrawati, Indonesia’s Finance Minister, at the 2020 Indonesia Fintech Summit in Jakarta,

Sri Mulyani acknowledged the growth potential for Indonesia’s digital economy to be extraordinary, which can be observed based on projections from research conducted by Google, Temasek, and Bain & Company.

She added that research shows Indonesia’s digital economy would triple from US$40 billion to US$133 billion by 2025.

The value of e-commerce transactions is projected to grow by at least four times from US$ 20 billion to US$ 82 billion, while online travel services will double from US$10 billion to US$20 billion.

In addition, online media is projected to grow from US$3.5 billion to US$9 billion, and the ride-hailing industry services from US$5.7 billion to US$ 18 billion.

However, Sri Mulyani has shared that she is aware that 12,000 villages across the country have yet to have access to the Internet.

“This (digital economy potential) cannot achieve any concrete results if the necessary conditions are not developed”, said Sri Mulyani.

To meet the necessary conditions, the Indonesian government has allocated a budget of 30 trillion rupiah (US$1.2 billion) to develop information and communication technology (ICT) infrastructure in 2021.

This budget will be used to build base transceiver station (BTS) towers in more than 5,000 villages, out of the total number of villages without internet service.

Added Sri Mulyani: “We develop the internet in more than 12,000 public service locations. We are also building a national data center, updating data, including those who will receive social assistance.”

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