ISD and the Ministry of Trade RI Present the "Indonesia Services Outlook 2017"

Jakarta, 17 November 2016

ISD and the Ministry of Trade RI Present the

Jakarta, November 17 2016. “The most fundamental problem when it comes to pointing out Indonesia’s potential in services sectors is the absence of reliable data. The second problem arises as the policy makers still undermine services sectors by putting them as a minor part in terms of its contributions toward economic growth and job creation. Meanwhile, if services were perceived by its value-added function, its contribution towards Indonesia’s Gross Domestic Product (GDP) in 2015 has reached nearly 45%,” mentioned Chris Kanter, Chairman of ISD Board of Founders, in his opening remarks at the Indonesia Services Outlook 2017.

As a collaborative event between ISD and the Ministry of Trade Republic of Indonesia, the Indonesia Services Outlook 2017 is aimed to identify opportunities in services sectors, as the so-called new sources of growth, and to provide recent updates to industry, researcher, and the Government of Indonesia. Attended by more than 200 key persons, the event featured Professor Mari Elka Pangestu (ISD Board of Advisors), Yose Rizal Damuri (ISD Board of Founders), and Herliza (Director of Trade in Services, the Ministry of Trade Republic of Indonesia).

Professor Mari started her presentation by emphasizing digital economy as the new wave of economy. She added that the Government, through various ministries, should not overlook digital economy since the potential is huge. With 51% of Indonesian population having access to internet (APJII, 2016), there are technically 132.7 million potential buyers to win.

“Suffice to say, internet-mediated trade will make financial-technology sector a big thing in 2017,” said Professor Mari.

Similar with Professor Mari, Herliza agreed that those 51% internet-literate population will help and promote digital economy to score a significant growth in 2017. On another hand, she shared how the Government of Indonesia involved in several international negotiations.

“It is well understand that the importance of services is captured in the inclusion of trade in services as one of development strategy in supporting foreign trade. Indonesia is now involves in AFAS Package 10, RCEP, ASEAN-Hong Kong FTA, Indonesia-EFTA CEPA, Indonesia-Australia CEPA, Indonesia-European Union CEPA, and many more. Most of negotiations talk about opening market access and discipline on domestic regulations,” said Herliza.

On particular services sector, Yose Rizal Damuri mentioned about encouraging tourism and travel-related services to maintain and improve the growth since the sector has contributed to 9.6% of GDP and 8.6% of total employment in Indonesia. Besides, this sector is also the biggest services export of the country and get special attention from international community. For example, the World Bank has planned to give US$200 million of loan to develop 3 out of 10 selected tourism destinations, which are Mandalika, Toba Lake, and Borobudur.

“When the growth is high, we should focus also on the quality of labors. If Indonesia wants to be the 7th largest economy in 2030, then improving the capacity of its informal and low-skilled labors is our mutual concern,” added Yose Rizal Damuri.