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.