e-Indonesia: Slow motion on a fast track

e-Indonesia: Slow motion on a fast track

By Fritz E. Simandjuntak

Since early 1990, the Internet, the worldwide network of
computer networks, has grabbed enormous public attention. The
news has been filled with stories about the Internet and its
impact on individual countries. Computer sales continued to rise
as more people were getting connected to the Net. Within just a
short period of five years the number of Internet users worldwide
jumped to 50 million. To put it in perspective, the radio needed
30 years and the television took 15 years to reach the same
figure. The International Data Corp. (IDC) has estimated that by
2003 Internet users will reach 500 million.

Many believed that the convergence of information technology,
communication and Internet technology, recently labeled "e-
technology", has become a permeating factor with an influence on
the success in the future competition of a country. "E-
technology" has pervaded all aspects of society -- business,
consumer and government -- and the restrictions of time and place
have been substantially reduced.

For business institutions, the letter "e" means a lot, as e-
business means connecting critical business systems and processes
directly to their constituencies; namely customers, suppliers,
vendors and employees via the Internet, Intranet and the World
Wide Web. As a result, business institutions will be able to
easily reach both new and existing customers, build loyalty
through customer services, connect extended teams together, and
increase bottomlines and revenues.

Consumers will have more access to enhanced information on the
products' availability and will be able to complete transactions
more effectively from their home. And for the governments, "e-
technology" will enhance their ability to access, manage and
utilize vast quantities of information. Consequently the
development of "e-technology" is likely to cause an impact not
only on the economy but also on business and the social
structure.

The Internet and e-business are also rapidly transforming the
production, consumption and distribution of knowledge and
information. Not only is information made available in different
electronic formats and through different network applications, it
is expanding at a most prodigious rate in terms of content.
People are finding that Internet technology has provided a
convenient way to communicate or to do online transactions.

Recognizing the importance of e-technology for developing the
competitiveness of a country, a number of developing countries in
Asia have already taken the initiative to utilize the trend. In
Singapore, the Tradenet System was implemented as a key component
of the country's export-oriented economic strategy. India
announced its Information Technology Superpower 2008 Project.
Within a period of 10 years, India expects to become one of the
biggest exporters of software in the world. Korea has its Cyber
Korea 21, aimed at turning Korea into an information and
knowledge-based country. To achieve the goal, Korea will push the
growth of the number of Internet users by a hundred times in
2002. The country requires the use of computers at its schools,
in addition to requiring the government sector to use e-
Government solutions and applications in the attempt to achieve a
transparent and clean administration.

Malaysia, with its Vision 2020, is hoping that by 2020 it will
become an even more advanced country and information technology
will be used as a strategic means to accomplish this goal.
Therefore, it has launched its Multimedia Super Corridor project
with emphasis on seven applications; namely e-Government, Smart
School, Telemedicine, National Smart Card, e-Commerce, Worldwide
Manufacturing Web and Web R&D. Through the project, in 2020 the
Malaysian government expects that economic growth will be far
more dynamic, transparent, competitive.

ASEAN countries also have an urgent strategy to turn the ASEAN
region into an "e-region". In November 1999, an e-ASEAN Task
Force was formed by the ASEAN leaders to assist them in achieving
the "ASEAN e-Space that would enrich the lives of its citizens
and enhance the spirit of the ASEAN community". At the 3rd Task
Force meeting in April in Singapore, the "elements" were adopted
which the Task Force recommended to the ASEAN Economic Ministers
(AEM) to incorporate them into the proposed e-ASEAN Framework
Agreement.

According to Forrester Research, 17 million households in the
U.S. were expected to shop online in 1991 with online retail
sales expected to US$20.2 billion. The number of pages on the Web
has reached 800 million with 56 percent of U.S. companies now
selling their products online. Research Inc. has released data
that suggests there are 64.2 million adults going online in the
U.S. every month and 82 percent of college graduates will search
for careers and employment information online.

Compared to those numbers, the development of Internet users
in Indonesia is still a long way behind both the U.S. and most
ASEAN countries. The Human Development Report by the United
Nations Development Project (UNDP) categorized Indonesia at a
medium level in terms of information flows. While the report by
IDC in 1996 ranked Indonesia 53rd out of 55 countries that it
surveyed based on the Information Society Index. The survey was
done using three main indicators: the social infrastructure,
information infrastructure and the use of computers and the
Internet.

Just recently a survey was held by Economist Intelligence Unit
(EIU) which explained that Indonesia was ranked 38th among the
world's best places to do e-business. The EIU study of 60
countries found that the United States was first while Japan was
trailing far behind in the 21st place. Among ASEAN countries
Singapore came in eighth, Thailand 28th, and Indonesia in the
38th place.

The EIU weighed two factors when assessing e-business
readiness on a country by country basis: the general business
environment and the "connectivity". In its evaluation of the
general business environment in the 60 countries, the EIU said it
has screened 70 different indicators, including the strength of
the economy, the outlook for political stability, the regulatory
climate, taxation policies and openness to trade and investment.
EIU said English-speaking countries tend to have a head start in
e-business because so much Internet content is in English, citing
Australia and New Zealand, which it said are already advanced e-
commerce players.

The EIU study has also shown that size does not matter (much)
when EIU said big countries like China, Indonesia, India and
Russia turned out to be less prepared for e-business than others,
though it did not rule out their potentials for e-business. The
British media said such results bring about the conclusion that
while the Internet is global, local conditions still matter. And
the Internet is a borderless network and allows businesses to
instantly go global. EIU said it was clear the U.S. is super-
ready, whereas countries like France and particularly Japan still
have shortcomings, particularly in competition policy.

Lou Gerstner, IBM chief executive officer, said that "every
now and then technology or ideas come along that are so profound,
so powerful, so universal that their impact changes
everything ... e-business will transform every institution in the
world. It will create winners and losers. It will change the way
we do business, the way we teach our children, communicate and
interact as individuals."

There is no doubt that most are unwilling to be losers in this
new economic environment. Therefore, it is obvious that, based on
our present condition, we need to take strategic steps to ensure
that information technology, advances in communication and the
Internet can help us attain the following goals:
1. People from all levels of Indonesian society should have easy
access to information.
2. The government should improve their credibility by promoting
efficiency, effectiveness, and transparency in governmental
business processes.
3. Small and medium business should have the capability and
ability to become part of a virtually integrated supply chain,
regionally or worldwide.
4. National integration should be preserved with the help of
technology, and Indonesia should remain a united entity in the
middle of the global information society.

In this context, the government has three possible routes when
encouraging the development of the "e-nation". It can lead by
example by being a pioneering user; it can regulate in a way that
will promote e-transactions; and it can introduce initiatives
that speed the transition into an "e-nation".

Unfortunately just recently the government announced
Presidential Decree 96/2000 which bans foreign companies from
investing in information services and the multimedia. There is
also Government Regulation No. 52/2000 which regulates small
businesses in opening Warnets (Internet cafes) which now requires
approval from the minister of communications.

To the surprise of a lot of people, these policies were
adopted and stipulated without first going through the
dissemination process of the parties that are supposed to be
involved in the implementation of such policies.

What this has revealed to us is that policy-making processes
in relation to the development of national information
infrastructure are still very much on the political.

However, given the limited capability that we now have for
utilizing the global information network -- compared to the
seriousness that other developing countries are giving to their
global information networks -- Indonesia is left with no choice
but to boost its effort in realizing the Nusantara 21 and
Telematika programs.

Top priority should be given to implementation of e-
government, e-learning and e-commerce applications, especially
those targeted to small and medium businesses. All of these
constitute the first step in building e-Indonesia, which is
necessary in order to significantly raise the level of Internet
literacy and to rapidly increase the number of people who are
connected to the global network.

Building e-Indonesia will lower the number of people without
access to information and will equip more people with the ability
to compete on a global level. Therefore those policies mentioned
above should be removed immediately and instead the government
should provide policies which will give more incentive to local
and foreign investors to speed up the development of Indonesia as
one of the big player in e-technology.

Fritz E. Simandjuntak is a sociologist and an IT observer
living in Jakarta.