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Indonesian President Joko Widodo, commonly known as Jokowi, vowed to develop all of Indonesia’s frontier areas to accelerate growth in Southeast Asia’s biggest economy, reports Bloomberg.

“We will develop areas such as Entikong, Natuna [close to where it is embroiled in a dispute with China] and Atambua so the world sees Indonesia as a great nation that pays attention to every inch of its land,” announced the President during his annual Independence Day speech in Jakarta.

While Indonesia is not a claimant in the broader disputes China has with several other nations over its South China Sea claims, President Jokowi has been emphasizing Indonesian sovereignty in the area.

The President forecasted a growth rate of 5.3% next year, well below the 7% he promised to achieve when he came into office in 2014. The deficit was expected to climb $25.4 billion, but at 2.41% of GDP, debt will be lower than the figure announced earlier this month.

President Jokowi wants to transform Indonesia, a string of more than 17,000 islands that would stretch almost from New York to London, into a maritime power.

He has also outlined plans to improve the country’s poor infrastructure, which has been the key roadblock to various economic growth, including a roadblock to ecommerce, due to the complex logistics infrastructure that makes last mile solutions difficult to manage.

Second to infrastructural improvement, the President also wants to solve unemployment.

President Jokowi’s second full year budget speech comes only three weeks after he re-shuffled his economic team, bringing back former World Bank Managing Director Sri Mulyani Indrawati as finance minister to pioneer a tax amnesty that could boost the economy next year.

The rupiah is forecast to be about 13,300 to the dollar in 2017, compared to today’s 13,096.

A version of this appeared in Bloomberg on August 16. Read the full version here

McKinsey Forum Urges Thailand To Speed Up Digitalization

Source: McKinsey

Speakers during the “Digitising Thailand’s Economy” forum held in Bangkok by McKinsey have called for a regulatory framework in order to speed up the country’s digital growth reports The Nation.

A proper regulatory framework, human-capital reform and private-public collaboration are needed to transform Thailand into a digital ecosystem for future economic growth. Although Thailand is an early adopter of digitization, it has been very slow in terms of investment and management.

According to Tomas Koch, Senior Partner at McKinsey, Thai businesses should be digitally disrupted in order to shift towards more agile performance.

Greg Theisen, fellow Senior Partner and Leader of McKinsey’s ‘Digital Asia’ practice comments,

Thailand falls behind Japan, South Korea, Singapore and Malaysia when it comes to ecommerce purchases, with only 22% of households shopping through ecommerce this year.

According to a survey by McKinsey, 30-40% of top business players could be replaced by digital disruption across all sectors in Thailand within the next five years. Companies in telecommunications, retail, financial services, media, healthcare and energy companies should invest more on digital adoption. To combat these challenges, companies are encouraged to integrate new and old operations, and invest in talent development.

The Minister of Commerce has also asked the Board of Investment to create schemes to attract foreign investment into the country in order to help boost economic growth.

“Human-capital reform is another national priority, with the aim of transforming people to ‘Thai Citizen 4.0’.”

For example, Thai farmers should be transformed into smart farmers while unskilled laborers should be made knowledge workers instead.

The government and various banks have been rolling out schemes to help empower the growth and potential of startups and SMEs, most recently with CIMB’s fintech initiative to expand SME customer base and Krungthai Bank’s soft loan offering to small businesses.

Despite the surge in Thailand’s fintech ecosystem, the country is also in need of other digital businesses such as property tech and education tech according to Krating Poonpol, Venture Partner at 500 Startups.

The biggest job now is to move from initial ideas discussed at the forum to execution.

A version of this appeared in The Nation on July 9. Read the full version here.

Mobile economy report for Asia pacific in 2016

Asia is mobile first. Source: asia.nikkei

The number of mobile subscribers in the Asia Pacific region will grow to 3.1 billion by 2020, up from 2.5 billion at the end of 2015 according to GSMA study, The Mobile Economy: Asia Pacific 2016, reports Digital News Asia.

Highlights from The Mobile Economy 2016

  • 62% of the region’s population was subscribed to a mobile service in 2015
  • Mobile ecosystem adds $1.3 trillion in economic value to APAC economy
  • The four largest markets in the region are China, India, Indonesia and Japan accounting for more than 75% of the region’s total subscriber base
  • Calculation shows that mobile technologies and services made up 5.4% of Asia Pacific’s GDP. This is set to increase to $1.7 trillion by 2020
  • Mobile broadband (3G/4G) accounted for 45% of total mobile connections in Asia Pacific in 2015
  • Mobile broadband’s contribution to total mobile connection is expected to rise to 70% by 2020. This is partly due to operators’ investments in 4G network build-outs
  • 4G is on track to account for more than a third of total connections in Asia Pacific by 2020

Over half of the world’s mobile subscribers are in the Asia Pacific, and this region will be the main engine of global subscriber growth for the decade.

Rising mobile subscriber penetration and acceleration to faster networks is fueling innovation across both advanced and emerging markets in this diverse region. Mobile connectivity is helping Asia build digital societies that allow people to have all access to services, anytime and anywhere. This factor is driving a lot of economic and social development among the Asian demographic.

China, India and Indonesia have been the main drivers of smartphone growth, helping the region double its overall smartphone base over the past 2 years.

Smaller countries in the region such as Indonesia and Myanmar will also make major contributions to subscriber growth.

As Asia Pacific mobile industry’s economy value is expected to rise to $1.7 trillion by 2020, it has become a major growth contributor for the economy. Not only will this create a wealth of opportunities for the region and employment opportunities, social and developmental services will also accelerate.

To fully utilize this potential, the mobile industry must work with regulators and ecosystem players to break the region’s multiple barriers, such as the lack of locally relevant content and affordability.

A version of this article appeared in Digital News Asia on June 6. Read the full article here.