Indonesia

Indonesia has been regarded as one of the success stories of developing countries escaping the resource curse (Rosser, 2004; 2007). In many developing countries, instead of becoming a source of economic growth, abundant natural resources have been associated with stagnant growth, a condition known as the resource curse or the paradox of plenty. As argued by Sachs and Warner (1997), economies with abundant natural resources have tended to grow less rapidly than those with scarce natural resources. Similarly, the resource curse has been defined as “the phenomenon whereby a country with an export-driven natural resources sector, generating large revenues for government, leads paradoxically to economic stagnation and political instability” (ODI, 2006). This chapter will review the efforts undertaken by Indonesia to diminish its dependency on natural resources and to better connect to global value chains (GVCs).

The study explores structural and practical issues following the adoption of Indonesia’s e-commerce roadmap (2017–2019) and its implications for the future of the country’s digital economy. Two major categories of issues are examined in order to identify problems and challenges confronted by related stakeholders. The first category, i.e. the structural one, relates to the larger governance context of the country’s digital economy to which e-commerce activities are attached. The governance context includes the legal and regulatory context, the institutionalizing mechanism and the implementing phases, which involve socio- and politico-economic interplays among its key players. The second category represents practical dimensions, which involve questions on the mitigation of and adaptation to concepts, models and practices in the digital economy. Indonesia’s position on the moratorium on e-commerce and the local initiatives on digital economy are presented to illustrate mitigation efforts by related stakeholders in areas where disagreements and negotiations on certain structural and practical policy issues have arisen, i.e. on Indonesia’s position on the World Trade Organization (WTO) moratorium on e-commerce and local initiatives (such as the ones in Yogyakarta) to develop a digital economy.

En el presente estudio se analizan las cuestiones estructurales y prácticas planteadas por la adopción de la hoja de ruta para el comercio electrónico de Indonesia (2017-2019) y sus implicaciones para el futuro de la economía digital de este país. Se examinan dos categorías principales de cuestiones, a fin de determinar los problemas y retos con que se enfrentan en cada caso las partes interesadas. La primera categoría, a saber, la de las cuestiones estructurales, se enmarca en el contexto más amplio de la gestión de la economía digital nacional con la que están relacionadas las actividades de comercio electrónico. El contexto de la gobernanza abarca el marco jurídico y reglamentario, el mecanismo de institucionalización y las fases de aplicación, que comportan interacciones socioeconómicas y político-económicas entre los principales agentes. La segunda categoría abarca las dimensiones prácticas, a saber, cuestiones relacionadas con la mitigación y la adaptación a conceptos, modelos y prácticas de la economía digital. Se presentan la posición de Indonesia con respecto a la moratoria relativa al comercio electrónico y las iniciativas locales en materia de economía digital para ilustrar los esfuerzos de mitigación de las partes interesadas en ámbitos en que ha habido discrepancias y negociaciones sobre determinadas cuestiones de política estructurales y prácticas, es decir, la posición de Indonesia sobre la moratoria de la Organización Mundial del Comercio (OMC) relativa al comercio electrónico e iniciativas locales (como las adoptadas en Yogyakarta) para el desarrollo de una economía digital.

Charles Dickens’ phrase “it was the best of times; it was the worst of times” is for many Indonesian workers an apt summary of their experience during the early 2000s. While the national economy and especially its resource-exporting sectors enjoyed trade-driven growth of unprecedented magnitude and duration, millions of blue-collar workers and labor market entrants found themselves paradoxically sidelined from well-paid jobs in manufacturing, and instead forced to seek livelihoods in low-paid, low-skill service sector jobs. This happened at a time when many Asian countries, led by the People’s Republic of China, were enjoying (continued) expansion of manufacturing trade by participating in global production networks, which in turn created better employment opportunities for their less-skilled agricultural workforces. For many Indonesians, on the other hand, the boom was a period of stagnating real wages and diminished earnings prospects, even as national income and spending surged ahead and overall expectations for the future became increasingly bright. For workers, the consequence of job displacement due to structural change would have been particularly severe during this time.