Indonesia digital economy Melawati finance minister

The digital economy of Indonesia could reach US$124 billion in 2025

Indonesia’s digital economy has the potential to reach US$124 billion by 2025, in line with a study by Google, Temasek, and Bain & Company, Finance Minister Sri Mulyani Indrawati stated.

“From US$44 billion (in 2020), it could increase to US$124 billion. This amount shows there is tremendous potential. The minister remarked that the economic potential could increase threefolds. The minister spoke at an event titled “Women Driving the Economic in the Pandemic Period” in Jakarta on Friday.

Ms Indrawati noted that the digital economic potential could be achieved. However, only if Indonesia can build digital infrastructure and develop its economy.

Hence, the minister emphasised that the government continues to encourage the development of digital infrastructure, especially amid the COVID-19 pandemic that prompts the transition of almost all community activities to online platforms.

According to Indrawati, the COVID-19 pandemic has led to a migration of almost all activities to digital platforms.

It happens because the COVID-19 pandemic requires people to maintain their distance so that technology can overcome that problem.

The minister ensured that the government had continued to provide digital infrastructure evenly based on Indonesia’s large geographical area. Indonesia is currently focusing development on underdeveloped, frontier, and outermost (3T) areas.

Indrawati pointed out that 12,377 public service locations in the 3T area currently do not have 4G facilities. Thus communication access in these areas is still highly unreliable.

“Hence, the government significantly increased the budget for 2021,” she noted.

Indonesia focused on the digital roll-out.

Moreover, the government has continued to improve digital literacy, including for small and medium enterprises, to boost the economy’s potential.

The government is also striving to expedite financial and digital inclusion gradually. The Family of Hope Program (PKH) is a good example. The PKH will benefit 10 million beneficiary families (KPM). PKH makes payments through digital transfers.

“Will people eventually be able to buy basic food online? Yes. We will conduct the rollout in stages. Thereafter, government salary payments and spending money for small and medium enterprises are also made digitally,” she expounded.

Regional neighbour the Philippines is also embarking on such programs too. 

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