Digital Economy Development In Indonesia Needs Cooperation Support From ASEAN And Asia

Illustration. (Photo: Unsplash)

JAKARTA - Center for Indonesian Policy Studies (CIPS) researcher Hasran assessed that the development of the digital economy in Indonesia needs regional cooperation support through strengthening the Free Trade Agreement (FTA) with ASEAN and Asian countries.

"Regional cooperation needs to be encouraged to maximize Indonesia's digital economy potential," said Hasran in an official statement, quoted from Antara, Monday, June 12.

While waiting for a general review of the existing FTA and the negotiated ASEAN Digital Economy Framework (DEFA), he said that Indonesia needs to complete two main homeworks, namely ensuring that the business and macroeconomic climates are conducive enough so that the digital economy can grow, as well as strengthen the digital economic foundation.

Currently, the digital economy clause is contained in two types of agreements, namely the conventional trade agreement (FTA) and the digital economic agreement (Digital Economy Agreement/DEA).

Within the ASEAN scope, Indonesia has followed several FTAs about the digital economy such as ASEAN Single Window agreement, ASEAN Single Window Protocol, ASEAN-Australia-New Zealand Free Trade Agreement, Regional Comprehensive Economic Partnership, and ASEAN Agreement on E-commerce.

Nevertheless, he said, the clause that regulates the digital economy in several FTAs has not been maximized in facilitating cross-border digital economic transactions. This is inseparable from the conditions of each member country.

This clause does not require member countries to prepare action plans and timelines to realize their commitment to the development of the digital economy.

Even so, Hasran said, amendments to these clauses are still possible. In the case of Regional Comprehensive Economic Partnership (RCEP), the general review process can still be carried out within five years after RCEP is approved.

In addition to the homework, he advised the government to also take other initiatives, such as seeking the development of digital infrastructure evenly and preparing export customs regulations for e-commerce transactions.

Indonesia has the highest digital economy transactions in ASEAN compared to other ASEAN member countries. In 2021, Indonesia's digital economy transactions cover 42 percent of the ASEAN market share.

RI is also the second most popular destination for investment in the digital economy after Singapore. As of 2021, Google, Temasek, and Bain & Company recorded that the total investment included in Indonesia's digital sector reached 9.1 billion US dollars, up double from 2020.