G20 Spotlights Indonesia’s Potential for Global and Regional Leadership
At the beginning of his second term, President Joko Widodo’s ambitious plans to reform the economy and state bureaucracy were put on hold to manage the unprecedented public health and economic crisis posed by the COVID-19 pandemic. But now Widodo and his government need a post-COVID road map to drive Indonesia towards a new generation of economic growth. Chairing the G20 provides Indonesia an important opportunity to refocus attention on the nation’s economic transformation and make Indonesia more resilient for the future.
Indonesia’s G20 agenda includes three important areas of focus: strengthening global health infrastructure, promoting digital transformation, and accelerating clean energy transitions and the financing to achieve it.
These three areas are important not just for G20 members, but also for Indonesia’s own economic future. Realizing each of these goals will require Indonesia to create a pro-innovation policy environment to generate renewed interest from industry leaders as well as foster Indonesian talent.
Innovative sectors, such as energy, biomedicine and tech, need certainty and predictability to facilitate market access and investment. An innovative ecosystem based on these principles is more likely to attract and cement the partnerships and capabilities that are the basis for the resilience Indonesia seeks.
Indonesia is not alone in looking to attract investment in health, technology and energy sectors. Other markets, both in Southeast Asia and across the developing world, are also competing for capital and innovation from world-leading firms. Currently, levels of foreign investment in Indonesia trail many of its neighbors.
Indonesia should adopt pro-innovation policies, including strengthening its intellectual property regime, in order to achieve their G20 goals. In the public health sector, for example, the government can invest more in health systems, eliminate unnecessary taxes and tariffs, reduce regulatory delays that inhibit access to new medicines and technologies, and amend its Patent Law to create greater certainty and consistency with international standards. The right approach to encouraging innovation can foster world-class capabilities and competitive, knowledge-based industries.
These actions would strengthen the health care sector and improve the health outcomes for Indonesians. But they are also critical for Indonesia’s broader economic transition to innovation-based sectors.