Indonesia has huge and unrecognized growth potential, which I would like to introduce.
Poor Indonesians everywhere in the huge archipelago can produce and sell products they create at home in local markets, for an extremely low fee.
They cannot export these products because of two main artificial obstacles: They cannot afford to get an exporter license and the international shipping costs from Indonesia are extremely high, which cannot be compared to shipping costs from China.
Indonesia’s cost of living is lower than that in China, so there is no reason why Indonesians will not be able to compete with affordable Chinese exports, if the shipping cost from Indonesia is competitive.
Another problem the Indonesian economy is facing is the low number of taxpayers and the huge size of the informal economy.
If we take these two main issues, and think on both of them together, we can find a solution that will tackle them at once, and will have much more benefits, as a bonus to society.
The idea is to have a governmental internet platform with mobile phone interface, where any Indonesian will be able to register as an exporter for free. It will enable new exporters to sell any legitimate product directly to a private customer or a business abroad. The system will manage and dramatically subsidize the shipping cost and take automatically tax from the revenue, much like the way Alibaba or Amazon are making their own revenues.
Here, the government of Indonesia will be the owner of that platform and it will control the commission (taxes) and shipping cost on the same platform.
What are the benefits for Indonesian society? First, higher social mobility of the poor and less people living under the poverty line. Second, gross domestic product (GDP) growth, as this platform will create new markets that did not exist before. Third, a rise in Indonesian foreign currency reserves. Fourth, increased number of taxpayers and, hence, total tax revenues.
The country’s potential is huge, as Indonesia is home to 275 million people, and even if only 1 in 100 use this platform there will be 3 million new exporters in Indonesia. The sky is the limit to what benefits this platform can contribute to the progress of Indonesian society.
The COVID-19 pandemic is a good time to kickstart such an initiative, as people prefer online shopping. Hence, online shopping will just become more and more popular, if not a normal, worldwide.
Politically, currently there is no secular or Pancasila political parties in Indonesia that can be perceived as focusing on poverty eradication.
Since the Indonesian Communist Party was banned in the aftermath of an aborted coup in 1965, the parties that are deemed as focusing on the welfare of the lower income people are some non-secular and relatively religious intolerant political parties and NGOs.
Hence, I think it will be very important for Indonesia as a religious, tolerant society to implement the aforementioned initiative (as well as any other initiative) that can help emerge people from poverty without huge investment in a relatively short time.
It would be recommended that the Indonesian government form an agency that will help people in rural areas and elsewhere to think about products they can sell abroad, and help them with the process. Knowledge of other languages is not essential, as today most of trading platforms have quite good automatic translation from any language to any language. This technology should be embedded in the suggested governmental platform as well.
To elevate dramatically the potential of this governmental export platform, schools can dedicate classes to individuals or groups and help them find products they can sell overseas.
Good luck, Indonesia!
The writer is a foreign businessman living in Medan.
Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.