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Indonesia: Digital Information Systems Can Increase Local Government Revenue

Indonesia Coordinating Minister for the Economy Airlangga Hartarto stated that based on a study, the electronification of transactions carried out by the Regional Government (Pemda) can increase Local Government Revenue by 11.1% per year. Therefore, he emphasised the importance of digitalisation in the regions as one of Indonesia’s key programmes.

Acceleration and Expansion of Regional Digitalisation (P2DD) information systems are being implemented more quickly in Indonesia. The system is used for collaborative work and includes features such as using PDN, government e-mail and the website domains p2dd.go.id and admin.p2dd.go.id.

Currently, 543 local governments, including 415 district governments, 94 city governments and 34 provincial governments, have used P2DD. Thus, participation in this information system service has reached 88.38% for Regional Governments and already 100% for Regional Development Banks, totalling 27 BPD.

“We also appreciate P2DD that was on track to reach the target in 2021 and 2022. In 2023 P2DD targets 65% of local governments to be in the digital category. With this, I certainly hope for the support of governors, regents and mayors so that P2DD becomes big and important,” said Coordinating Minister Airlangga.

In addition, the government is pushing for digital economic transformation to anticipate global economic conditions that are currently experiencing an outbreak. In 2022 the world economy is projected to grow by 3.2% but decrease to 2.7% in 2023. For this reason, the administration is attempting to maintain a 5.72%national economic growth rate in quarters III-2022. At the end of 2022, the government estimates that national economic growth will be at 5.2% on an annual basis (year on year). Meanwhile, in 2023, the government projects the national economy to grow at 5.3%.

The pressing challenges brought up during Indonesia’s G20 Presidency are reflected in the urgency of the digitally based economic transformation. The Digital Economic Framework Agreement is one of Indonesia’s goals for the 2023 ASEAN Chair, among others.

Indonesia has established QRIS, which is interoperable among ASEAN nations, as part of the Digital Economic Framework Agreement plan. Regional adoption of QRIS will reduce the demand for dollars while strengthening national foreign exchange reserves.

To achieve regional technological advancement by 2030, Indonesia is aiming towards accelerated digitisation. The Information System for the Acceleration and Expansion of Regional Digitalisation (P2DD) is utilised as a means of achieving the goal.

“In 2023, the Ministry of Communication and Information will implement the utilisation of the P2DD information system, including to fill in the electronification index of local government transactions,” explained Minister of Communication and Information Johnny G. Plate in Jakarta.

The Minister of Communication and Information also asked for the simplification of all P2DD information system services. All local governments must therefore streamline all P2DD lines, from regional ETP index to online help desk services.

Moreover, the government can evaluate regional performance levels through the P2DD information system. The performance review is carried out through the provision of an evaluation assessment module for the P2DD team and the SPBE interoperability data index.

Apart from it, Johnny added that the ground-breaking for constructing Tier-IV permanent NOP with global standards has been done. The service hopefully can be used before the end of the current government period in 2024. The PDN development mentions Johnny as a concrete form of Ministry of Communication and Informatics support in the P2DD Programme.

Indonesia’s government wants to establish a national data association through PDN so that institutional and policy data centres are not dispersed across the country. He believes that each ministry, institution, provincial, district, and municipal regional government will work together to perceive the budget and manage PDN.


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