ADB to Support Technological Transformation in Indonesia

JAKARTA, INDONESIA (11 December 2017) — The Asian Development Bank (ADB) has approved $750,000 to Indonesia to provide knowledge support and technical assistance to study the impact of disruptive technologies on the Indonesia economy.

The potential benefits of the digital economy for Indonesia are projected to be significant. Indonesia is among the fastest growing internet markets in the world. Indicators such as internet traffic, revenue from cloud services, and connected devices (Internet of Things) are growing rapidly. Home-grown online ride-hailing applications, such as Grab and Go-Jek, have not only created jobs, but often provide better wages and benefits, such as health insurance and access to bank accounts, compared to more traditional jobs. However, disruptive technologies may also pose important risks for Indonesia in the form of potential jobs losses in certain sectors and increase in inequality.

“ADB’s technical assistance will help map the impact of disruptive technology on the Indonesian economy, both at the aggregate and the sector levels,” said Winfried Wicklein, ADB’s Country Director for Indonesia. “ADB is keen to support the government’s efforts to leverage the benefits of technology, while mitigating risks.”

The government has developed "2020 Go Digital Vision", which entails Indonesia emerging as the largest digital economy in the Association of Southeast Asian Nations (ASEAN) region by the year 2020. The 14th economic reform package issued last year included a comprehensive roadmap for promoting e-commerce. The government has also started targeted measures and programs to promote Fintech and other technologies as part of its strategy to reduce poverty and inequality.

“Indonesia stands at the crossroad of global technological changes,” said Suahasil Nazara, Chairman of the Fiscal Policy Agency at Indonesia’s Ministry of Finance. “Better knowledge on this fast evolving topic will be essential for informing enabling policy and investment decisions.”

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.