Remarks of President of the Republic of Indonesia at the ASEAN Business and Investment Summit 2020 (virtually), Friday, 13 November 2020 from the Merdeka Palace, Jakarta
Date 13 November 2020
Distinguished Entrepreneurs from ASEAN countries,
Ladies and gentlemen,
The COVID-19 pandemic has caused an enormous world crisis. All countries are facing negative economic growth. More than 30 million people in ASEAN are at risk of losing their jobs. All economic and business calculations must be recalculated. During difficult times like today, we believe there remain opportunities. We must remain optimistic. Even though there are many problems, but there are also great opportunities.
In the midst of this pandemic, we are actually seeing the acceleration of digitalization development. According to the UN Secretary General’s report, cellular networks have reached more than 95 percent of the global population. As of June 2020, there are 441 million people or around 65 percent of the ASEAN population who are internet users. The world’s dependence on digital technology is increasingly higher. More than 1.5 billion children have to study from home, hundreds of millions of people have to work with virtual platforms, online shopping has increased sharply. This condition has certainly provided a great opportunity to accelerate digital transformation.
In ASEAN, the potential of the digital economy is expected to reach US$200 billion by 2025. In Indonesia, the potential of the digital economy is estimated to reach US$ 133 billion in 2025. However, there are still many challenges in digital transformation. First, many types of old businesses and jobs have closed. About 56 percent of jobs in five ASEAN countries are at risk of being lost due to automation. Second, the digital gap in ASEAN countries is still very large. Internet penetration has not been evenly distributed across ASEAN countries. Of the 10 countries, only 3 countries have internet penetration above 80 percent. We must anticipate these challenges and mitigate them.
Ladies and gentlemen,
Facing those challenges, we must make various breakthroughs. Business as usual is not an option. We must accelerate digital transformation. Moreover, ASEAN’s digital economic activity is still small, only 7 percent of the total ASEAN GDP. There are three crucial things that we must push:
First, ensure an inclusive digital revolution. An inclusive digital revolution requires 3A (Access, Affordability, and Ability). We must continue to strive for these three aspects so that the democratization of digital access can work. The preparation of adequate and equitable digital infrastructure throughout the region must be the main agenda, not only for urban communities but also for villages, at affordable prices and followed by increased digital literacy through upskilling and reskilling human resources.
Second, ASEAN must become a big player in a digital-based economy. The digital economy must be the economic strength of ASEAN. Instead of being a market, we must be a big player. The digital economy must help MSMEs in the ASEAN region to enter the global supply chain. MSMEs are the backbone of ASEAN’s economy because MSMEs represent 89-99 percent of all companies in ASEAN. I believe that the acceleration of the digital transformation of MSMEs will encourage the revival of the regional economy. The governments of each ASEAN country must have a bigger role in driving digital transformation. This is important to make ASEAN a digital-friendly region.
Indonesia itself has a promising digital ecosystem. Indonesia has 2193 start-ups in 2019, the fifth largest in the world. Indonesia also has 1 decacorn and 4 unicorns. Since 2018, Indonesia has developed a road map for Making Indonesia 4.0. We have built industrial manufacturing and development centers of innovation. We provide fiscal incentives in the form of a super tax deduction for industries that invest in research and development.
Third, we must strengthen synergies to create a conducive digital ecosystem in the region. We must join hands to eliminate barriers to digital trade, build legal certainty, simplify licensing procedures and systems, build synergy regulations on digital trade, e-commerce and digital connectivity, as well as strengthen partnerships between the government and the private sector (PPP-Public Private Partnership) in order to strengthen digital connectivity. This synergy must be inclusive, nothing can be left behind. That is a requirement if we want to make ASEAN a winner in this era of digital transformation. No one is left behind.
I thank you.
Translated by Syarifah Aisyah
Reviewed by Lulu Wuliarti