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Luhut B. Pandjaitan: Economic Transformation and Digitalization are Important Pillars of Economic Growth

Sumedang, Coordinating Minister for Maritime Affairs and Investment Luhut B. Pandjaitan said that one of Indonesia’s visions in 2045 is to become a high-income country. This was conveyed at the West Java Digital Services International Festival event at the IPDN campus on Thursday (22-12-2022). It was conveyed that the role of digital technology is one of the sources of Indonesia’s future economic growth.

“We need to continue economic transformation and digitalization in all sectors, which is one of the important pillars to support the achievement of this goal. Indonesia’s GDP (Gross Domestic Product) is expected to reach USD3.0 trillion and GDP per capita to reach USD10,000 by 2030. Economic growth should be in the range of 5.5 to 6.5 percent,” Luhut added.

Digital transformation targets by 2024 are planned to include 95 percent of villages covered by broadband mobile network infrastructure, 60 percent of sub-districts covered by broadband fixed network, 80 percent of the population covered by digital broadcasting, and three digital startups.

In utilizing digital technology, the government has also implemented an Electronic-Based Government System (SPBE) policy to support the acceleration of digitalization. This is stated in the 2020-2024 RPJMN with a target of implementing SPBE in the Central Government by 100 percent, Provincial Government by 80 percent, Regency / City Government by 50 percent. The SPBE Strategic Plan (Renstra) includes strengthening SPBE governance, strengthening SPBE services, strengthening SPBE infrastructure, strengthening and developing ICT 4.0.

“The government needs to see digitalization as something bigger than just application technology. Digitalization must be seen as a governance effort that is oriented towards digital services,” said Luhut.

In addition, Sumedang Regent Dony Ahmad Munir also mentioned SPBE. According to him, with SPBE, services in the government system will be easier and faster, “That’s why today the importance of this task is how we as Regents/Mayors will better understand the importance of improving SPBE, because SPBE services will be easy, fast, and agile. The Coordinating Minister is absolutely right that with this digitalization it becomes efficient. Sumedang itself with this SPBE, our stunting in 2018 was at 32.4 percent and this month real time stunting at 8.29 percent. Our investment in the previous year was 1.2 trillion, this year 4.4 trillion,” he explained.

Various efforts have been made by the government to utilize digital technology, such as government spending directed through the use of E-Catalog to purchase domestic products and domestic MSMEs, the use of the Mineral and Coal Information System (SIMBARA) between Ministries / Agencies, increasing port efficiency through port integration and implementing a national logistics ecosystem, and investing in data centers, and submarine cables to support the digital economy. These efforts are made to reduce costs and corruption rates, so that they can also result in an increase in state revenue as well as domestic industries and MSMEs.

“Various digitalization measures that have been implemented in government and business activities have shown that digitalization can drive efficiency, reduce loopholes for corruption, and increase state revenue as well as the participation of MSMEs and local businesses,” he explained.

Currently, the digitalization of the goods and services procurement system encourages the efficiency of state spending and is directed at increasing domestic products. This can be seen through the number of products in the E-Catalog increasing, because it is also driven by a simpler and faster process. For example, the consolidation of laptop procurement at the Ministry of Education and Culture can drive efficiency to close to 30 percent.

Furthermore, the submarine cable project is the motor of digital economic growth in Indonesia. This project is an internet highway intended for communication and carrying digital data with very fast transmission speeds. Currently, Indonesia has four submarine cable projects that are being or will be built in Indonesian waters. Through these projects, economic growth can also benefit from submarine cable investments. The Indonesian Research Affiliation Institute (LAPI) of ITB said that the implementation of 5G networks through the preparation of submarine cable infrastructure in Indonesia has the potential to increase GDP cumulatively from 2021-2030 by 9.5 percent or IDR 2,874 trillion.

“Therefore, it is mandatory for the government to continue to catch up with the increasingly sophisticated times and take positive benefits from existing technological developments to provide services to the public more efficiently,” said Luhut.

Minister Abdullah Azwar Anas was also present at the event. On this occasion, Minister Anas explained that the use of digital technology will focus on four aspects, “So our hope is that Pak Governor, Pak Regent of Sumedang, we will focus on four digitalizations. One is handling poverty, two is increasing investment, three is digitizing government administration, the fourth target of the President is shopping in the E-Catalog,” he added.

Furthermore, West Java Governor Ridwan Kamil also attended the West Java Digital Services International Festival. Governor Ridwan Kamil said that West Java province is the province with the largest population in Indonesia which is almost 50 million people, “where these 50 million people all aspects of their lives are being digitized, with the concept of west java digital profits. One of them has been conveyed by the Sumedang Regent. But, long story short, don’t be surprised if in West Java you feed the fish using a cellphone with internet optic. Feeding chickens has also used cellphones, looking for fish in the sea at Ratu harbor has used cellphones, watering plants has also used digital,” explained Governor Ridwan Kamil.

The West Java Digital Services International Festival was also attended by Minister of Administrative Reform and Bureaucratic Reform Abdullah Azwar Anas, West Java Governor Ridwan Kamil, and Sumedang Regent Dony Ahmad Munir.

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