By Agnes Anya
The Jakarta Post
Asia News Network
Jakarta recently chose to abstain from the Osaka Declaration on the Digital Economy, launched during the G20 Summit last week, despite its spirit of pushing forward with the development of the internet-based economy.
The Foreign Ministry's development, economy and environment director Agustaviano Sofjan explained that the position was taken to secure Indonesia’s national interests amidst possible digital data exploitation.
“Indonesia supports any efforts to encourage the digital economy. However, in any negotiation about the digital economy, it is important to safeguard data privacy so that Indonesians' personal data will not be exploited by countries mastering digital technology," he told The Jakarta Post recently.
He then explained that the Osaka Declaration on the Digital Economy, also known as the Osaka Track, was a reiteration of a joint statement issued in the World Economic Forum in January in Davos this year.
In the document, 76 countries stated that they had agreed to start negotiations on e-commerce regulations at the World Trade Organization (WTO).
However, Indonesia also abstained from the Davos outcome because, Agus argued, the statement did not particularly express a commitment to securing data privacy, although Jakarta had no problem with e-commerce being ruled on under the WTO.
The country is currently deliberating a data privacy bill and expects the draft law to be passed this year.
The deliberation is a response to the rise of the digital economy in Indonesia, which has seen recently re-elected President Joko "Jokowi" Widodo make the digital economy one of his economic focuses.
The country currently boasts three start-up unicorns – companies valued at more than US$ 1billion (Bt30.5 billion), namely e-commerce firms Tokopedia and Bukalapak, as well as airline ticketing and hotel booking service Traveloka. Meanwhile, ride-hailing firm Gojek has been classified as a decacorn with a value of more than S$10 billion.
“[Regulation on e-commerce] is still developing not only in Indonesia but also in other countries. But, with the many unicorns grown in this country, it shows that we have been making progress on it,” Agus said in response to the critics.
He added that during the G20 Summit Indonesia joined the leaders’ declaration, which stated a commitment to data privacy through a Data Free Flow with Trust initiative spearheaded by Japan. The initiative was introduced by Japanese Prime Minister Shinzo Abe at the Davos event this year.
In the latest G20 Joint Leaders’ Statement, the leaders agreed to create regulations that allow cross-border free data movement to be conducted "with trust", which could be built through the protection of personal information and intellectual property, as well as reinforced cybersecurity.
Separately, Indonesia’s deputy chief for international economic cooperation at the Office of the Coordinating Economic Minister, Rizal Affandi Lukman, said that Indonesia decided not to make any commitment yet by abstaining in the Osaka Track and Davos' Joint Leaders’ Statement because it was still examining e-commerce requirements in international trade. This included cross-border transactions and their taxation.
"[Abstaining] does not mean Indonesia has been absent from international policy discussions [on e-commerce and the digital economy]. We will keep joining discussions but cannot take part in any commitment right now," he said.
He further said that despite the abstention, Indonesia was committed to developing its digital economy and, because of that, Jokowi proposed the Inclusive Digital Economy Accelerator (IDEA) Hub initiative in the summit.
Jokowi, during a session at the last week's event, explained that the IDEA Hub was an experience-sharing forum of digital business models of G20 unicorns with governments and private entities.
International economy expert from the University of Indonesia, Asra Virgianita said that Indonesia's abstention was rational amidst the potential digital threat at the international level and the country's weak digital data protection law.
"The fear of data exploitation by countries with more advanced digital technologies is certainly reasonable given the condition of the digital divide between developed and developing countries," she said.
"On the other hand, I see that Indonesia itself has yet to draft qualified domestic regulation to anticipate the implications of the digital economy. Our domestic rules are still very weak. We are still working on this digital economy business," she continued.