Indef: Crucial Digital Transformation Issues Discussed At G20

Illustration. (Photo: Doc. Antara)

JAKARTA - Institute for Development of Economics and Finance (Indef) researcher Nailul Huda assessed that the digital transformation issues discussed at the G20 Indonesia 2022 Presidency are crucial for developing countries, including Indonesia, and need to be continuously encouraged to accelerate economic recovery.

"Our economy will move towards a shift from a machine economy to an internet-based and digital economy. Trade will be more globalized, data exchange will be faster, so that the economic recovery will be driven by the internet or digital," said Nailul, quoted from Antara, Wednesday, June 1.

In addition, digital transformation is also considered capable of increasing financial inclusion and literacy for people who already have a bank account but cannot access other financial products (underbanked) and individuals who already have access to financial services but are still very simple, such as only savings (unbanked).

"In Indonesia, the underbanked and unbanked people are still around 50 percent more. So it is very important for Indonesia," said Nailul.

Nailul added, with the 2022 G20 Indonesia Presidency, Indonesia can actually encourage inclusiveness with digital transformation for all countries.

"Cooperation in the field of infrastructure development to the expansion of digital economic services between countries can be developed. The financial sector, trade, can encourage inclusive digital economic growth," said Nailul.

The development of the digital economy is one of the main strategies for Indonesia's economic transformation and is aimed at accelerating economic recovery after the COVID-19 pandemic. The development of the digital economy is also driven by a shift in people's behavior that tends to use digital platforms in various sectors.

The positive trend of the development of the digital economy is also in line with the development of investment. The results of a study by Google, Temasek, Bain & Company (2021) show that the investment value of Indonesia's digital economy during the first quarter of 2021 was US$4.7 billion and has exceeded the highest value for the last four years. This achievement makes Indonesia the most popular investment destination in Southeast Asia, surpassing Singapore.

In addition to investment, Indonesia also has various potentials that can strengthen opportunities for accelerating the development of the digital economy. In 2021, the value of Indonesia's e-commerce transactions will reach IDR 401.25 trillion, with a transaction volume of 1.73 billion.

The digital economy in Indonesia is the highest in Southeast Asia where in 2021 the economic value will be recorded at around 70 billion US dollars and is estimated to reach 146 billion US dollars in 2025.