Image Credits: Tempo.co English
Indonesia has emerged as the second-leading digital investment destination in Southeast Asia for 2023, trailing only behind Singapore, according to Coordinating Minister for Economic Affairs Airlangga Hartarto. Speaking at the Indonesian Digital Finance Economy Festival 2024 in Jakarta, Hartarto revealed that digital investments in Indonesia totaled nearly $22 billion last year, surpassing those in Vietnam and Malaysia but falling short of Singapore’s $141 billion.
This substantial investment reflects the government’s ongoing efforts to advance digital payment systems and enhance the country’s digital economy infrastructure. The progress is also evidenced by Indonesia’s rise in global competitiveness rankings, moving up 11 spots to 45th place in 2023, compared to its 56th position in 2019.
Hartarto highlighted the broader regional context, noting that the ASEAN digital economy reached $194 billion in 2022, with Indonesia contributing a significant 40 percent of this total. The e-commerce sector remains a key driver of Indonesia’s digital economy, bolstered by a favorable environment for digital technology adoption.
Several factors are fueling ASEAN’s digital market expansion, including a growing base of 460 million internet users across the region, high digital service adoption in rural areas, and a robust $13 billion in venture capital investment in the first half of 2023.
Indonesia’s digital landscape is further supported by a thriving start-up ecosystem, featuring 15 unicorns and 2 decacorns. This vibrant sector underscores the potential for Indonesia to leverage its digital economy niche within ASEAN’s burgeoning market.
In a parallel address, President Joko Widodo emphasized the critical role of the digital economy amid global economic uncertainties. He projected that Indonesia’s digital economy could quadruple by 2030, with estimates ranging between $210 billion and $360 billion. “Our digital economy holds immense potential,” Jokowi stated, reiterating the government’s commitment to harnessing all available resources to drive future growth.
The announcements underscore Indonesia’s growing prominence in the regional digital economy, driven by strategic investments and robust sectoral growth.