The Jakarta Post Spotlight: G20 Digital Transformation: Resilient MSMEs for Global Economic Recovery

Jakarta, 30 June 2022: Dr Lili Yan Ing, ERIA's Lead Advisor on Southeast Asia, was invited as one of the main speakers at Jakarta Post's 'Spotlight 12' which is part of their Road to G20 Series, along with Dr Sri Mulyani Indrawati, Indonesia's Finance Minister, Dr Joan José Daboub, Co-chair of B20 Task Force of Trade and Investment, and Mr Pamitra Wineka, CEO of TaniHub Group. The event addressed the theme: G20 Digital Transformation: Resilient MSMEs for Global Economic Recovery'. Dr Ing presented the key ingredients necessary to support strong and resilient MSMEs during the COVID-19 pandemic. First, it is important that the government supports both supply- and demand-sides, like what the government of Indonesia (GOI) has provided since 2020, particularly for MSMEs in 2021. In 2020, IDR112 trillion was allocated for interest rate subsidies and tax subsidies. In 2021, the GOI allocated IDR187 trillion in corporate financing to support MSMEs to continue their operations during the pandemic. Second, the government needs to ensure that the allocated funds and assistance will be well distributed and reach the targeted beneficiaries.

Dr Ing also discussed the digital divide between countries and the integration of MSMEs into digital trade. There are three significant technological gaps: internet speed, internet usage, and technology production. Compared to developed countries, developing countries, including Indonesia, are experiencing huge technological gaps that hinder businesses, including the MSMEs, to apply digital trade. The regulatory framework provided by the government will play an important role in integrating MSMEs into digital trade through the provision of good electricity, knowledge on international market standards and service qualifications, and assistance in digital transformation.

Following Dr Ing's work on Indonesia's G20 presidency, she highlighted the global challenges in digital transformation and digital trade: privacy, cyber security, competition, and the digital divide. Dr Ing expressed the importance of having a better privacy and competition laws in supporting digital transformation as well as tackling the digital divide, especially between developed and developing countries.

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