Indonesia must prioritize digital growth policies that don’t worsen inequality

indonesia must prioritize equality
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As Indonesia experiences a digital surge that is projected to create new types of jobs for 20-45 million workers, experts are warning that the country’s growing inequality could be amplified.

Indonesian National Development Planning Minister and Head of the National Planning and Development Agency (Bappenas) Suharso Monoarfa, said that the Indonesian government is optimistic that economic growth in 2023 will beat 2022’s target, which ranges from 5.3% to 5.9% year-on-year, according to OpenGov.

The Asian Development Bank (ADB) early this month reported that Indonesia’s economy is expected to accelerate to 5.0% this year as private consumption, manufacturing activity, and investment remains strong, underpinned by supportive macroeconomic policies.

ADB said that in the medium term, Indonesia should harness digitalization for growth, and that firms should step up in terms of tech transfer, innovation R&D, and build a tech-savvy workforce.

However, a previous report by the World Bank cautioned that unless the country takes steps to improve access to education and skills training, there is a risk that opportunities will only benefit those who already have access to the skills and resources needed within the fast-growing economy.

The report said that increased use of technology may lead to more polarization in Indonesia. Consequently, it urged authorities to focus on three policy priorities to ensure that digital technologies lead to greater inclusion.

The first priority is to boost digital connectivity and universalize access to high-quality internet through efforts such as improving clarity of regulations around the sharing of telecom infrastructure. Connectivity remains a challenge for many people in Indonesia, with only 36% in rural areas connected to the internet.

The second priority is to ensure that the digital economy works for everyone. This can be supported by better logistics and greater investment in relevant skills for the digital era. AWS reported last month that 98% of its Indonesian respondents believe that digital upskilling is important for their jobs, and 36% think they are not being trained enough to prepare them for the workplace of the future.

The third priority is using digital technologies to provide better public services, improve the quality of citizen-and-state interactions, and build trust in the digital world.

“There are a whole host of opportunities to use digital technologies for promoting better healthcare delivery, and improving access among the underserved but these need to be built on a base of reliable and interoperable data systems,” said Minister of Health of the Republic of Indonesia, Budi Gunadi Sadikin, during the launch of the World Bank report. “The pandemic has generated an unprecedented urgency to make this a reality and has also created a momentum to expedite adoption of digital technologies.”

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