World Report

s Indonesia carves out a new identity for itself, it is increasingly turning to technology to increase its competitiveness. There is a strong movement to get the country online in a bid to improve communications and raise education standards.

The government has invested large sums in setting up the infrastructure required to get people into cyberspace. Although most schools and educational establishments are not online yet, things are moving quickly. More than 160 ISP licences have already been granted and about 60 are operational. Internet cafes, mostly self-financed by local entrepreneurs, are springing up everywhere.

Money, technology and government help are not the only important factors. In many places the driving force is local volunteers’ dedication to community education.

High speed wireless internet technology across the country is turning many young Indonesians into global villagers. Long term, this will help transform the country into a knowledge-driven economy. “The economic transition continues to advance,” says Indonesia’s Vice President, Hamzah Haz.

A key part of the drive is to create added value for the economy. Investment in ICT manufacturing is booming in some parts of the country, such as Batam and Bintan. Foreign companies are keen to set up production sites for radio transmission sets, fibre-optic components, cellular phone parts and electronics.

Japan’s Matsushita Electric Industrial is spending over £3 million on a new factory while US-based E20 Communications is to double output of fibre-optic parts from its plant in Bintan. Indonesia is quickly learning to compete, justlike other countries of the Southeast Asian region did before it.

Investment in telecommunications are also expected to gather pace. The mobile phone market is set to rocket in the next decade, as in a nation of 240 million people, there are currently less than 10
million users.

Plans to liberalise the sector further are keenly awaited. Investments should gather momentum due in part to ST Telemedia’s new controlling stake in Indonesia Satellite (Indosat), the nation’s second-largest phone company. Overall, the telecoms sector is expected to grow by 50 per cent up to 2006.

Syamsul Mu’arif, Minister of Communication and Information, says the development of e-government initiatives will further assist in promoting transparency and in consolidating democracy. There are some problems facing the industry though.

“The first is the law,” he says. “Our country does not have a cyber law yet.” There are plans to bring together various strands of the law to coordinate the sector, which will ease issues such as electronic payments, for example. “We hope this will be the beginning of future ICT developments.”

The prospect of more internet connections and more mobile phone users has profound implications for Indonesia’s scattered population. The development of the ICT sector will represent a massive boost to infrastructure.

There is a major initiative called e-Indonesia to get the country online, which is being supported by other Asian countries, such as South Korea. “We are facilitating businesses to support it,” says Mr Mu’arif. “We will move another step forward when the project is established. We estimate that the super highway will be operative this year.”

Useful websites

Indonesian National Government:
www.indonesia.go.id

Indonesian Ministry of Communication and Information:
www.kominfo.go.id

Indonesian Culture and Tourism:
www.budpar.go.id

British Embassy in Jakarta:
www.britain-in-indonesia.org.id

Indonesian Embassy in the UK:
www.indonesianembassy.org.uk

Investment in Indonesia:
www.bkpm.go.id

The Indonesian Bank Restructuring Agency:
www.ibra.go.id