The Indonesian Minister of Finance, Sri Mulyani, recently conversed with the Chinese Minister of Finance, Liu Kun. The bilateral meeting was held virtually, discussing the impact of the COVID-19 pandemic—especially the financial recovery strategy.
They discussed how the pandemic is a major challenge for financial recovery and continues to be a threat. G20 members started to anticipate another pandemic possibility in the future by establishing a Financial Intermediary Fund.
The contribution to Financial Intermediary Fund sets at USD 50 million. Liu Kun strongly supports the establishment, which acts as a funding platform for economic recovery after the pandemic. He further explains that China is also looking to contribute to the initiative.
He expresses his appreciation for Indonesia for taking the initiative and paying extra attention to the issue of food security. In addition, China will actively support and assist Indonesia in the overall effort to promote global economic recovery.
They plan to improve global governance to enable developing countries to play a more significant role in the future. The different sectors that China aims to focus on include the digital economy, green economy, global health, and welfare.
China identifies itself as a developing nation. Due to the mutual standing between Indonesia, they also share the interest of strengthening the market in developing nations, specifically to increase trade relations between the countries.
China and Indonesia have close ties, which is seen through the donation of medical equipment provided to Indonesia by China during the initial stage of the COVID-19 pandemic. Therefore, bilateral cooperation continues to become more strategic and comprehensive.
In addition to the relationship between the two countries, 290 million doses of China-made vaccines have also been distributed and given to the Indonesian people.
Indonesia’s On Track with Financial Recovery
The National Statistics Agency reveals that the Indonesian economy is steadily recovering financially due to the increasing trade mobility amidst the ongoing tension between Russia and Ukraine.
Such positive trends can arise in the economic performance of Indonesia. Indonesia’s economy is expected to gain momentum and welcome between 4.5% and 5.3% growth in 2022. The growing domestic demand and export performance sustains the financial recovery strategy.
Economic growth is directly proportional to the vaccination rollout, the reopening of economic sectors, and the Indonesian government’s fiscal policies to increase the recovery rate.
Revitalize Through the Digital Economy
The Indonesian Ambassador to the Republic of Korea has shared how Indonesia has prepared new sectors such as digital services, health services, electronic assembly, and other novel industries.
These new business sectors show potential for developing an excellent investment destination. Investing in these new sectors in Indonesia would encourage sustainable development.
Indonesia also hopes to deepen its cooperation with China in trade, investment, green growth, and digital economy. The two countries must demonstrate solidarity with other developing countries in various projects.
Specifically, their cooperation is expected to complete and open the Jakarta-Bandung High-Speed Railway, which is part of the cooperation conducted under the “Belt and Road Initiative” that the two heads of state have agreed upon.
The Strategy of the Digital Economy
Indonesia has already set up a Digital Roadmap for 2021-2024 as a strategic guide to achieving digital transformation. The initiative aims to provide equal access to high-quality telecommunication services.
The strategy employed by the government is to create dependable and consistent connectivity to close the digital divide and also increase the ratio of internet connectivity across regions.
Indonesia’s digital transformation puts high importance on ten sectors to speed up the realization of digital infrastructure, government, economy, and society. The sectors are as mentioned below:
- Digital transportation and tourism;
- Digital trade, digital financial services;
- Digital media and entertainment;
- Digital agriculture and fisheries;
- Digital real estate and urban;
- Digital education;
- Digital health;
- Industrial digitization; and
- Government digitization.
There are 100 essential projects spread between the ten sectors to be implemented through coordination and collaboration between the ministries, the central and regional government, corporate actors, and the general public.
The COVID-19 pandemic is one of the dominant catalysts for digital transformation. This momentum will be utilized for economic change, specifically in the digital sector.
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