Indonesia Improving Policies to Ensure Favorable Environment for Creative Industry Growth

Finance Minister Sri Mulyani Indrawati said the government is well aware of potential in the creative economy and that it is working to improve policies through available instruments to foster the industry's growth in the archipelago. (Photo courtesy of the Ministry of Finance)

By : Sheany | on 6:05 PM November 08, 2018
Category : Business, Economy, Featured

Nusa Dua. Finance Minister Sri Mulyani Indrawati said the government is well aware of potential in the creative economy and that it is working to improve policies through available instruments to foster the industry's growth in the archipelago.

Speaking at the inaugural World Conference on Creative Economy in Nusa Dua, Bali, on Wednesday, Sri Mulyani said there is strong political will from President Joko "Jokowi" Widodo to allow new technologies to grow and provide safe havens for innovation to thrive.

She said the government's focus on infrastructure is meant to give all Indonesians efficient, low-cost access to new technologies, including fintech.

Fintech for example, has been growing rapidly in Indonesia over the past five years, to 235 companies last year from only 25 in 2012, she said.

"Infrastructure is not a luxury or pet project; it is the backbone for Indonesia to design an economic policy that includes the creative economy and technology in a much more inclusive way," Sri Mulyani said.

The minister said she supported the idea of expanding the creative economy, but conceded that that Indonesia has yet to capture this potential to the best of its ability, citing the fact that the industry only contributed about 7 percent on average to the country's economic growth in recent years.

One obstacle involves changing the mindset of policy makers and bureaucracies, which would require various approaches.

During the International Monetary Fund and World Bank Annual Meetings in Bali last month, Jokowi emphasized the importance of a "light touch and favorable environment" to enable growth in this industry, which could be in the form of deregulation or more appropriate policies.

For Indonesia, this is an evolving policy formulation that has seen high-level officials reaching out to industry players and actively listening to their needs and concerns, Sri Mulyani said.

"The digital economy can thrive when the formulation of policy is right," she said. "The government will continue to define and design the right policies for the creative economy and fintech to prosper."

In April this year, the Ministry of Industry launched its "Making Indonesia 4.0" roadmap aimed at improving Indonesia's competitiveness through improved connectivity, technology, information and communication.

The roadmap includes several key cross-sectoral initiatives, such as building national digital infrastructure, designing incentives for technology investments and harmonizing regulations and policies.

The Ministry of Finance is also looking at how it can improve its role, including through research and development, or tax incentives.

"We are also investing in human capital; the people. Whether it's in the form of early education, or vocational training and higher education scholarships such as the LPDP," Sri Mulyani said, referring to the Indonesian Endowment Fund for Education.

She touched on ongoing efforts by the central in cooperation with district governments.

"We are hoping that if we are consistent and committed to continue improving our policies, Indonesia can become more progressive in developing its creative industry and digital economy as potential for our future economic growth," Sri Mulyani said.

The minister expressed her willingness to learn more about the creative economy and ways she could assist in its development.

"I am not hesitant to say I'm willing to learn. I don't know everything, but I'm keen to always learn more and more," she said.

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