February 24, 2024

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Digital transformation to spur Indonesia’s economic recovery in 2021

The Ministry of National Development Planning of Indonesia has identified digital transformation as a key pillar that the government must focus on in 2021 to ensure effective public service and governance. One of these areas is digital transformation which Minister Suharso Monoarfa of the National Development Planning, described in a statement as crucial in meeting increased demand by the citizens for seamless transactions during the COVID-19 pandemic. 

With the onslaught of the pandemic, global economies have witnessed an acceleration in terms of digital evolution. The new normal became a catalyst for increased velocity to shift to innovative solutions to adapt to a ‘new reality’. The Minister added that 2021 will mark the first year for global economic recovery.  

He also said, “Virtual meetings with various platforms have emerged in various countries, including Indonesia. We live in a new reality, which is marked as a less contact economy, or less contact society. This is a new reality that we face and will apply in the future”. 

The Ministry’s statement was made during the 2021 Development Outlook Webinar. The event, which had the theme “Learning from 2020, Rise to 2021”, was attended by over 2,000 participants. A similar virtual meeting will also be held for an in-depth discussion on development strategies, economic indicators and government targets. 

Aside from digitalisation, other key areas that need to be considered for next year’s governance framework include maintaining an adaptive strategy to boost economic resilience and setting integrated structural adjustments.

During the virtual meeting, the Minister announced that the Indonesian government is set to carry out a new Government Work Plan for 2021 in an attempt to mitigate the effects of the pandemic on government operations. 

One of the nation’s priorities as a continuing measure to prevent the spread of the COVID-19 virus is to leverage on sectors that have been seen to be essential during the pandemic. E-commerce, logistics, food delivery and technology must be streamlined alongside efforts to adapt to the new normal. 

The Minister added that of equal importance is a government-led initiative to map out sectors of the economy that have been most affected by restrictions during the pandemic. Doing this, he stressed, will provide policy lessons that can be used to restructure Indonesia’s disaster management systems. 

More than infusing digital technology into an otherwise traditional system in government, a change in mindset is essential to trigger momentum for collaborative governance and effective policy networks. 

Driving economic recovery 

The Ministry shared that the government estimates the economy to grow by 4.5% to 5.5% in 2021 on the back of strong investments particularly in the tourism and industrial sectors. For the nation to be on track in its economic targets, it needs investments amounting to IDR 5,800 to IDR 5900 trillion (US$ 408 million to US$ 413.4 million), the bulk of which will be contributed by the private sector. 

Amalia Adininggar Widyasanti, Deputy for the Economy of the Ministry of National Development Planning, mentioned that they are seeing a gradual recovery in the tourism sector. She also stressed that the industrial sector will likely get a boost of 5%. 

The establishment of a digital integrated airport network is likewise on the agenda, as Indonesia projects that infrastructure development will hasten economic growth next year. 

The statement comes after a roster of digital upgrades the Indonesian government has introduced to many of its government agencies. As previously reported by OpenGov Asia, the Ministry of Public Works and Public Housing announced the integration of Building Information Modelling (BIM) technology in government construction projects. With the adoption of the BIM system, the government is optimistic that it can further fast-track its digital transformation journey. 

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