Luhut: Indonesia's Digital Economy Grows Above Malaysia And Singapore, But Loses To Vietnam

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. (Photo: Doc. Setkab)

JAKARTA - The digital economy in Indonesia continues to grow and expand. Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said Indonesia's digital economy grew above neighboring countries, namely Malaysia and Singapore.

Luhut Pandjaitan said Indonesia's digital economic growth is in line with similar growth in the Southeast Asia region. Overall, it has recorded a Gross Merchandise Value of up to USD 105 billion.

"Indonesia's digital economy can develop double digits above ASEAN countries such as Malaysia and Singapore", he said, during the Digital Learning with Bukalapak and Microsoft event, Monday, March 8.

Despite being superior to Malaysia and Singapore, said Luhut, Indonesia's digital economy growth is still inferior to Vietnam. Meanwhile, Indonesia's digital economy has grown below it, which is growing above 10 percent.

"Even though (superior to Malaysia and Singapore) we are still behind Vietnam (which is growing) by 16 percent", he said.

Based on data from the Global Startup Ecosystem Report 2020, said Luhut, Indonesia is rank first in the world based on the value of the digital ecosystem. The value of Indonesia's digital ecosystem, amounting to USD 26.3 billion or equivalent to IDR 376.09 trillion.

Meanwhile, still referring to the same report, Indonesia is in second place out of 100 developing digital ecosystems or emerging ecosystems. Luhut said, especially in Indonesia, the development of the digital economy cannot be separated from investment in Indonesia's digital sector.

In 2020, the Investment Coordinating Board (BKPM) noted, foreign investment entering the transportation, warehousing, and telecommunications sector which supports the digital economy reached USD 36.5 billion or IDR 532 trillion and Domestic Investment (PMDN) of IDR 93. 2 trillion.

"The large investment was partly contributed by several startups including Bukalapak, with an investment contribution to the Indonesian economy of 31.9 percent of GDP. The digital investment will not only encourage the progress of the digital economy but become one of the keys to restoring the national economy", he said.