Luhut Binsar Pandjaitan, Coordinating Minister for Maritime Affairs and Investment

Digitization helps government in creating efficiency

From the perspective of Luhut Binsar Pandjaitan, Coordinating Minister for Maritime Affairs and Investment

There are eight unicorns in digital startups in Indonesia, and they continue to grow. From the government’s perspective, what is the expected impact of these unicorns?

We expect an increase in added value, employment, taxes, and of course, technological development. This development will result in higher efficiency. Indonesia will be one of the countries with the most unicorns in Asia or maybe globally since it provides a business-friendly environment. Hence, the strength of our digital economy will further expand its ecosystem. The Indonesian younger generation is extraordinary, as long as they are always united and willing to compete.

When the pandemic becomes endemic, there are concerns that digital adoption might slow down. What are the government’s efforts to maintain the momentum of digital adoption, especially in the economy?

The government spending in the state budget (APBN) reaches almost IDR 1,200 trillion. This year’s government spending through e-catalog, in which products are made by MSMEs, is targeted to reach IDR 400 trillion. Therefore, domestic industry and local employment will flourish, and higher efficiency will also be achieved. The government will also create a system that connects all ministries and agencies to streamline coordination.

The current decision-making process is also done virtually since it is faster and safer. As a result, we can reduce corruption and misuse of APBD (regional budget). Currently, all e-catalogs have been digitized, so spending can go directly through e-catalogs to avoid a tender process. Moreover, Indonesia also achieved the all-time high exports value of USD 232 billion. This is due to higher efficiencies in multiple avenues such as digital connectivity of domestic ports to a one-stop national service system, namely the Indonesia National Single Window (INSW).

Hence, so many positive changes have occurred due to this pandemic, which results in the increase of digital adoption and reduction of mobility as new ways of doing business.  

Currently, there are still digital competitiveness gaps in several regions. What are the government’s efforts to promote equal competitiveness nationally?

Currently, major venture capitalists provide connectivity such as between sellers and buyers, motorcycle taxi drivers and passengers, and so on. In the future, technological adoption should also happen in the other industries where the actual goods and services are created, such as the agriculture industry. This will boost equal digital competitiveness and enable other sectors to breed unicorns.

In fact, digitalization has made its debut in the agriculture sector, although so far, their primary focus is on distribution and marketing instead of in production, where the biggest problem lurks. Agritech should enable companies to manage the risks and open new markets. Moreover, some startups are starting to join the food estate sector.

What are the central government’s efforts in encouraging transformation in regional governments?

The government wants to be more efficient, and digital adoption is the only way to achieve this. Digitalization will enable higher connectivity, reduction in corruption, increase in efficiency, and eventually improved competitiveness level. For instance, an easier audit process is enabled by adopting an e-catalog. Currently, regional governments are still trying to transform due to suboptimal levels of supervision and challenging geographical conditions. But now, with the e-catalog, it is easier for the audit process. 

The effort to promote digitalization in the regional government may seem a little progressive. We encourage regional governments to include the utilization of e-catalog into the key performance indicator (KPI) of regional leaders. Moreover, to ensure integrity, the process will also be audited. Reward and punishment approaches will be imposed to promote higher digitalization.

In addition, despite minor complaints from several parties, the introduction of Online Single Submission (OSS) has generated positive reviews. Further discussion with relevant stakeholders such as APINDO, KADIN, businesspeople, foreign investors will be conducted.