Keeping this in mind, the Chairman of BKPM Thomas Lembong voiced his concerns about Indonesia’s complicated bureaucracy, with its excessive and rigid procedures, which he saw as a serious hindrance to the effort of the country’s digital economy players, especially those working in the services sector, to adopt more sophisticated innovations to enhance their businesses. Indonesia should cut red tapes for investment.
He added that the BKPM’s strategy of cutting red tape — known as the greatest hindrance to investment in Indonesia — to support the digital economy was much better to help local players expand their operations internationally to embrace global competition than taking protectionist measures. Due to the digital economy’s seamless nature, protectionist approaches would not do much to help local players at all, he explained. Indonesia should cut red tapes for investment.
Instead of being afraid of global competition, Indonesians should embrace it as motivation to further boost their business qualities instead, he explained, adding, “Local players should endeavor to sharpen their competitive advantages to go global, or at least go regional.” Go-Jek, for instance, has expanded its operations to other Southeast Asian countries. So far it has been officially operating in Vietnam, while Philippines and Singapore have shown positive responses to the brand’s expansion plan to their countries. Currently, the brand is attempting to expand to Malaysia as well, despite facing some difficulties in their attempt to penetrate into the country’s market.
He added that the Indonesian digital economy could in fact thrive thanks to minimum protectionist measures on the government’s part. He continued by saying that the highly protected conventional sectors did not show the same rate of growth as the digital economy exactly because of these protectionist regulations, which might hinder local players from exchanging expertise and knowledge with their international counterparts. Indonesia should cut red tapes for investment.
According to Thomas, that protectionist measures hinder the economy this way has also been seen in other countries. He also encouraged Indonesian policymakers to learn from how other countries regulated their digital economy sector.
(source: The Jakarta Post)