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)