Indonesia plans major digital infrastructure investments to boost economy

Indonesia is planning to expand its investment in digital infrastructure as part of efforts to strengthen the country’s digital economy push and improve its already positive economic growth trend.

In the coming year, the government has announced a stimulus package aimed at triggering buoyant activity in several sectors as well as investments that have a high potential to positively influence sustainable growth, and put the country on the path towards achieving the objectives of the Golden Indonesia 2045 vision.

Several biometrics procurements have also been lined up in the coming months, including one for an ABIS upgrade, as the government sharpens the focus of its digital transformation agenda.

According to Forbes Asia, the growing adoption of AI in the country is also already luring investment from some of the tech giants around the world such as Amazon Web Services (AWS). This interest is reflected in a summit organized in Jakarta by AWS in August to discuss the generative AI, executive leadership, and how these can transform not only Indonesia, but the rest of the Southeast Asian region.

That forum served as a platform for leaders to share thoughts on how to prioritize digital innovation as a major aspect of the country’s digital transformation. Issues around data governance, connectivity, security and resilience, sustainability, and partnerships also had a preponderant place in the discussions.

Foundational ID as pillar of DPI

For Indonesia, the success of its DPI implementation is largely dependent on the country’s national digital ID (IKD) which it has already rolled out and has been issued to at least 17 million people.

This process requires the country to strengthen its partnerships and learn best practices on digital ID from other nations with enviable examples, GovInsider reports, citing experts during a recent panel discussion in Jakarta.

As part of efforts to meet this goal and also play a major role in shaping the global digital governance discourse, the country has also indicated its readiness in hosting next year’s edition of the Global DPI Summit.

Organized by the Directorate General of Population and Civil Registration, the Jakarta forum discussed the pertinence of a digital ID, its use cases, what model best fits Indonesia, the need for interoperability, and security, among other important subjects. The World Bank’s Jonathan Marskell, for instance, discussed different digital ID models, noting that Indonesia doesn’t need to copy any foreign model, but should function with one that best suits its population size and uniqueness. The country can start off with a centralized digital ID system for now, Marskell suggests, “but in the long term, the decentralized model will become key part of Indonesia’s digital economy.”

DPI as digital transformation enabler for emerging economies

Like Indonesia, some countries in the Global South such as Brazil, India, Nigeria and South Africa, have been lauded for their efforts in developing indigenous digital public infrastructure (DPI) which are facilitating access to public and private sector services in a number of ways.

According to an analysis published by the International Institute for Security Studies (IISS), these nations do not consider DPI and digital ID as “merely technical utilities,” but “instruments of governance and access, defining who participates in the digital economy and on what terms.”

The author mentions India’s Aadhaar and UPI which have tremendously facilitated service delivery though biometric authentication and enhanced participation in the digital economy, Brazil’s instant payment system Pix launched in 2020, Nigeria’s National Identification Number (NIN) which is now owned by more than 121 million citizens, and South Africa’s membership of the Digital Public Goods Alliance (DPGA) which is surely inspiring the implementation of the country’s MyMzansi DPI roadmap.

Per the writer, these and other emerging nations are using their DPI and partnerships to influence the global digital order and shape digital governance.

“These indigenous infrastructures reduce dependency on foreign platforms and capture domestic rents from payments, IDs and data. While largely state-led, their execution ultimately depends on the private sector, whether foreign or domestic. This can complicate top-down national control, yet often enhances resilience,” the writer posits.

She argues that the examples of DPI development in the four countries underscore not only the contributions it can bring to their economies, but also the risks of overdependence on foreign digital assets and models offered by countries like the United States and China, and a bloc like the European Union.

Article Topics

digital economy  |  digital ID infrastructure  |  digital public infrastructure  |  Identitas Kependudukan Digital (IKD)  |  identity management  |  Indonesia