Forward Indonesia: 4.0 industry, tourism, trade, and investment
Indonesia is a wonderful country, as encapsulated by its tourism slogan, “Wonderful Indonesia.” With more than 17,500 islands, Indonesia is the largest country in Southeast Asia with a population of 260 million — making it the world’s fourth most populous nation. It also has one of the most diverse society in the world, as the country consists of around 300 ethnic groups — each with its own set of customs, traditions, beliefs, and culture; and with over 700 different native languages spoken.
As a developing country, it is the world’s 10th largest economy in terms of purchasing power parity. Over the years, Indonesia’s economic outlook continues to be positive with domestic demand as the main driver of growth and supported by a robust investment, stable inflation, and a strong job market.
For years, Indonesia has made great progress as a nation. After more than 100 years of being under the Dutch colony and about three years under Japanese colonialism, the archipelagic country finally gained its independence on Aug. 17, 1945. This year, the country is celebrating its 74th year of independence — and one of its goals is to become one of the greatest countries in the world.
MAKING INDONESIA 4.0
To further strengthen this, President Joko “Jokowi” Widodo launched “Making Indonesia 4.0,” a roadmap that would enable the country to be prepared for the fourth industrial revolution. The fourth industrial revolution is the enhancement of computers and automation with smart and autonomous systems supported by the Internet of Things (IoT), artificial intelligence, human-machine interface, robot and sensor technology, and 3D printing.
As the world continues to experience this revolution, Indonesia needed to be ready to join the rest of the world. In order for Indonesia to become a competitive nation, it will require the development and integration of connectivity, technology, information, and communication.
The roadmap has identified 10 national priorities, as set by Industry Minister Airlangga Hartanto: 1) reform material flow to strengthen material production at the upstream level; 2) redesign industrial zones by building a map for the national industrial zone and to overcome the problems faced by several industrial zones; 3) embrace sustainability and accommodate the sustainability standard through the global sustainability trend such as electric powered vehicles (EV), biofuel and renewable energy sources; 4) empower SMEs through technological funding; 5) build nationwide digital infrastructure supported by 5G network, fiber optics, and data centers for the development of the national digital economy; 6) attract foreign investments by targeting renowned global manufacturing companies through attractive incentives offering to accelerate the transfer of technology; 7) improve and upgrade human capital by redesigning the academic curriculum to adjust to the industry 4.0; 8) establish an innovation-based ecosystem through the development of a research development and demonstration center by joint efforts from the government, private sector, public, and universities; 9) incentivize technology investment such as tax exemptions or subsidies for the adoption of certain technologies; and 10) re-optimize regulations and policies
In addition to these, the “Making Indonesia 4.0” roadmap identified five sectors that are named as priority sectors, namely, food and drinks, automotive, textile, electronics, and chemicals. These sectors are the key sectors in the world economy, and therefore are envisaged to boost the country’s exports in the future and have a thriving role in the manufacturing sector towards the country’s gross domestic product (GDP).
If the roadmap proves successful, it will boost the economy of Indonesia by one to two percent. Hence, in the years of 2018-2030, Indonesia’s GDP growth rates should be at least six to seven percent per year. Meanwhile, the manufacturing industry is targeted to contribute between 21 to 26 percent to the nation’s GDP by 2030. Meanwhile, job creation through the roadmap is estimated at seven to 19 million by 2030.
THE 10 NEW BALI PROGRAM
Indonesia is a popular tourist destination. Through tourism, it creates jobs and generates revenue that both the local and national communities can benefit from. Prior to the roadmap, in 2016, President Widodo’s government announced plans of improving its tourism sector through “The 10 New Bali program.” Tourism is a key driver for economic development. Bali is one of the most popular islands of Indonesia and has dominated the country’s tourism industry. It is regularly featured as one of the world’s best travel destinations. In 2018, 14 million foreign arrivals were recorded, 6.5 million was recorded at Bali’s Ngurah Rai International Airport. For 2020, the government plans to reach 20 million tourist arrivals.
To boost the tourism of other areas, President Widodo introduced the tourism strategy as a way to replicate the economic effects of tourism in Bali nationally. As an archipelagic country, Indonesia has more than 17,500 islands. Its unique and unspoiled geography offers natural attractions — volcanoes, lush forests, mountain ranges, unique flora and fauna; rich cultural heritage and diversity; and a dynamic history — from ancient kingdoms and dynasties, to more recent history of modern European colonial traders.
The program seeks to improve infrastructure, as well as make the country information and computer technology (ICT)-ready; encourage foreign investment by easing regulations; encourage sustainable development to preserve the natural environment of the islands; ease access regulations for yachts in five seaports to allow passengers to enter and depart Indonesia by boat; increase flight routes; enhance internet connectivity; increase sports tourism; implement a visa-free travel policy for 169 countries; promote local marketing campaign (Pesona Indonesia) and international marketing campaign (Wonderful Indonesia); bolster security, health and hygiene; promote social economic zones to draw foreign trade investors; promote special zones for meetings, incentives, conferences and events; and develop tourism-focused colleges and academics.
The 10 islands included in the program are: Lombok Mandalika, Borobudur, Lake Toba in North Sumatra, Tanjung Lesung in Benten, The Thousand Islands, Tanjung Kelayang Beach in Bangka Belitung Islands, Mount Bromo in East Java, Labuan Bajo in East Nusa Tenggara, Wakatobi in South Sulawesi, and Morotai Island in North Maluku. These islands were chosen for their potential and scope to become outstanding tourism attractions, apart from Bali.
FORWARD INDONESIA
In 2000, Indonesia placed 27th in the Global GDP ranking, and in 2016, it jumped to 16th place. With these plans and strategies already being implanted by President Widodo’s administration, it is only a matter of time before Indonesia fully realizes its potential of entering the Top 10 biggest global economies by 2030, and becoming one of the leading nations in the world.