Government urged to regulate e-commerce growth

Government urged to regulate e-commerce growth

JAKARTA (JP): Experts and Internet companies called on the
government on Tuesday to immediately create a clear and
integrated law to ensure a smooth and rapid growth in electronic
commerce in the business and government sectors.

Jonathan L. Parapak, commissioner of Lippo E-net and former
secretary-general of the Ministry of Tourism, Post and
Telecommunications, said the government should no longer delay
formulating the practical guidelines and regulations on e-
commerce.

"We urgently need to have a regulation that administers the
rules of the game, especially regarding the security aspect. E-
commerce will continue to grow here and it needs a clear
direction and legal assurance, too," he told a seminar on e-
commerce.

The general manager of e-commerce service provider PT
Indosatcom, J. Kriswanto, said security and legal assurance were
important for providers and customers of e-commerce.

"It will be very hard to get more people buying things on the
Internet if there is no assurance that virtual purchasing is
technically safe and legally guaranteed," he said.

He said the growth of e-commerce in Indonesia was still slow
mainly due to the lack of security assurance as well as
infrastructure, such as computer and telephone lines.

Data from state-owned telecommunications company PT Telkom
said there was only 5.94 million fixed lines available for
Indonesia's population of 210 million at the end of September
last year.

An estimated two million people in Indonesia have access to
computers, but only about 250,000 have computers at home.

Kriswanto cited a recent international survey on e-commerce in
Asia classifying Indonesia as a country with quite a slow
adaptation to e-commerce, with e-commerce transactions growing by
16 percent to 18 percent in recent years.

According to the survey, Singapore was the most adaptive
country with e-commerce transactions growing by over 28 percent.

However, information technology research specialist
International Data Corporation (IDC) of the United States
recently predicted e-commerce use in Indonesia would grow faster
starting from 2000, in line with the recovery of people's
purchasing power and the entrance of more e-commerce service
providers.

At least four giant local companies -- namely, the insurance
firm Asuransi Lippo Life (Lippo E-net) and electronics and office
equipment suppliers Astra Graphia, Multipolar and Metrodata
Electronics -- have recently announced their entrance in e-
commerce business.

Lippo Life, for example, announced last week the company's
decision to change its name to PT Lippo E-Net and shift its focus
to internet business.

The company said it would invest up to Rp 2 trillion ($278
million) to finance its expansion to Internet-based businesses,
including an Internet-based insurance brokerage, banking,
securities brokerage, shopping and Internet infrastructure
providing.

With the arrival of more new e-commerce providers, IDC
estimates the number of individuals and companies participating
in e-commerce in the country will reach about 70,000, with total
transactions amounting to $100 million this year.

IDC said Indonesia was previously very slow in absorbing e-
commerce, which was indicated by the low volume of transactions
of less than $20 million during the period of 1996 to 1999. (cst)