Indonesia-s Readiness for Digital Economy: Case of Trade in Services in ASEAN
Iwan Hermawan
Expertise Agency and Secretary-General of Indonesian House of Representative, Jakarta-Indonesia
Abstract
Indonesia-s digital economy is projected to become the largest in Southeast Asia. One of efforts to realize that path, Indonesia has signed the 10th Package of ASEAN Framework Agreement on Services. The commitment increases to trade in services cooperation. However, the Indonesia-s readiness is highlighted by many parties, such as lack of human resources skill, poor infrastructure, and affordability uneven. It is worrying that would become boomerang for economic growth. The purpose of this study is to analyze Indonesias readiness for digital economy through trade in service in ASEAN level. This study employs quantitative approach with Gravity Model. The secondary data in panel data period 2014-2016 and includes ASEAN-6. The variable digital economy readiness is represented by networked readiness index. While data sources come from Comtrade, IMF, World Economic Forum, and Indonesian Ministry of Trade. The analytical method uses Poisson Pseudo Maximum Likelihood and resolved with Stata 13. Based on the interim results indicate that the level of Indonesias readiness for digital economy will affect the flow of trade in services in the ASEAN market. Therefore, it is important for government to ensure that there are prerequisites that must be prepared in grabbing benefits of momentum of the digital era.
Keywords: Trade, Service, Digitalization, Gravity Model
Topic: International Conference of Islamic Economic and Financial Inclusion