TradePAG Theme #2: Arranging Policy Orchestration to Accelerate Digitalization in Trade
Date:3 May 2023
Digitalization of trade is a necessity that is not only capable of escalating economic growth after the Covid-19 pandemic, but also leveraging competitiveness and improve people's quality of life. Among the fields in the application of trade digitization, e-commerce (lokapasar / marketplace) is the leading sector that stimulates the digital transformation of trade. This initiative is also implemented in the traditional markets which are closely related to people’s lives.
The presence of trade digitization is expected to be a solution for the various conditions of the traditional markets, some of which are not yet feasible, not yet developed, and not yet connected so that the result opens up more opportunities for the development of the market. Meanwhile, various challenges arise when the digitalization of the traditional market development and it has the potential to interfere with the benefits for economic development. These challenges include: (a) there are no comprehensive rules of the game to create a level of playing field for domestic goods in order to be able to compete with imported goods, (b) the utilization of trade digitization is more prevalent in the downstream side than upstream, (c) the low competitiveness of some products, and (d) digitalization of trade which in fact has not been optimally utilized by the traditional market.
Therefore, the policy recommendations for Ministry of Trade becomes essential to support the acceleration of trade digitization, especially in the traditional market.
The effectiveness of the policy requires policy orchestration that involves the role of other ministries/agencies so that the outputs and outcomes are maximized. These various policies include (1) building a digital trading ecosystem that is able to facilitate digital trade transactions at affordable and reliable costs, (2) increasing market share of local products on the marketplaces platform, (3) building infrastructure and managing big data digital trade transactions, (4) support economic competitiveness at the domestic and global levels through digital literacy of human resources, and (5) accelerate the digitization of traditional markets.