Coordinating Minister For Airlangga Asks The Shipping And Port Sector To Adapt To Accelerate Digital Transformation

Coordinating Minister for Airlang Hartarto (Special)

JAKARTA - National economic growth in the second quarter of 2021 reached 7.07 percent year on year (yoy) or the highest in the last 16 years. All economic sectors grew positively and showed improved performance with improving domestic demand and trading partner countries.

The Transportation and Warehousing sector also showed positive and highest growth in the second quarter of 2021, which grew by 25.1 percent. While more specifically, the Sea Transportation Sub-sector could grow 16.41 percent (yoy) in line with the increase in world trade volume and Indonesia's export-import activities.

In addition, recovering demand and rising global commodity prices have led to a trade balance surplus for 17 consecutive months and a relatively high foreign exchange reserve of US$144.8 billion.

However, the world faced challenges with supply chain logistics disruptions, mainly due to the increasing demand for inter-country logistics vessels, limited container supplies, and bottlenecked international ports.

"The shipping and ports sector must be able to adapt to this high demand and find a way out so that logistics costs, which are the heart of international trade, can be maintained," said Coordinating Minister for the Economy Airlangga Hartarto in a keynote speech delivered at the Virtual Expo Maritime Indonesia (VEMI) webinar. 2021 with the theme “Digitalization, Technology, & Innovation in the Maritime Sector” which will take place on Thursday, 29 October.

Meanwhile, the pandemic that has occurred since 2020 has accelerated digital transformation in all aspects. The digital economy is growing into a new force and is believed to continue to grow bigger. The shipping and port sector is expected to quickly adapt to this transformation.

In an effort to implement port digitization and improve logistics conditions in Indonesia, the government has built a National Logistics Ecosystem (NLE).

This national logistics ecosystem harmonizes the flow of goods and documents traffic, both international and domestic, which is oriented towards cooperation between government and private agencies, through data exchange, process simplification, elimination of repetition and duplication, and is supported by an information technology system that covers all related logistics processes and linking existing logistics systems.

Thus, exporters and importers only need to make transactions through an NLE online platform.

With NLE, it is hoped that there will be efficiency in logistics processing and a reduction in national logistics costs, which is targeted to decrease from 23.5 percent to around 17 percent in 2024 as stated in Presidential Decree No. 18 of 2020 concerning Action Plans for National Logistics Economic Restructuring.

In addition to building NLE, the Government's efforts to encourage digital transformation are through the development of digital infrastructure. Starting from the construction of the Palapa Ring fiber optic network and the provision of Base Transceiver Stations (BTS), the development of internet access and the ICT ecosystem, expansion of 4G and 5G access to the construction of the Satria multi-function satellite which is planned to start operating in 2023.

Digital transformation also requires competent digital talent as its implementer. For this reason, the Government has also held various simultaneous programs to increase the number of digital talents in Indonesia, such as the Digital Talent Scholarship which provides 100 thousand scholarships per year, the Pre-Employment Card Program which can be used for upskilling or reskilling in the digital field by job seekers, and Super Incentives. Tax deduction for industries that participate in carrying out vocational activities.

"Thus, we encourage development not only in ship and port infrastructure, but also in parallel with the development of digital infrastructure," said Coordinating Minister Airlangga.