Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Report by Centre for Strategic and International Studies

2018 Centre for Strategic and (c) 2018 Centre for Strategic and For any questions regarding this International Studies (CSIS) International Studies (CSIS) & report, please contact: Facebook Indonesia. All rights Jl Tanah Abang III No 23-27 reserved. Ira Setiati 10160. Indonesia ([email protected]) www.csis.or.id

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Authors And Information

Authors : Dandy Rafitrandi, Fajar B Hirawan, Medelina K Hendytio, Vidhyandika D Perkasa, Yose Rizal Damuri Assisted by : Arya Fernandes, David Christian and Ira Setiati Table of Contents

page IV Executive Summary page VI Life in EI, as shown by the indicators page VII Life in EI, as perceived by local residents page IX How information & digital technology shapes the life of EI society page X MSME behavior and attitude toward digital technology ES page XII Recommendations for assistance programs

page 01 1 Introduction page 02 1.1 Background 01 page 03 1.2 Methodology

page 07 2 Socio-Economic Conditions in EI page 08 2.1 Socio-Economic Indicators page 11 2.2 Socio-Political Situation page 14 2.3 Socio-Economic Situation in EI (Findings from the survey) page 14 2.3.1 Public Service Consultation and Administration 02 page 15 2.3.2 Public Service in Education and Health in EI page 16 2.3.3 Security Situation page 17 2.3.4 Economic Situation page 18 2.3.5 MSME Characteristics

page 21 3 Information and Digital Technology in EI page 22 3.1 General Conditions page 23 3.2 The Use of Information and Digital Technology page 23 3.2.1 Governance page 27 3.2.2 Education 03 page 29 3.2.3 Economic and SMEs

page 35 4 Summary and Considerations for Assistance Programs page 36 Some Considerations for Assistance Programs page 38 Possible Assistance Programs page 38 Capacity Building page 40 Technical Assistance for Platform Development 04 page 40 Assistance for Facility Development IV Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia V P. IV ExecutiveExecutive SummarySummary

P. VI Life in EI, as shown by the indicators

P. VII Life in EI, as perceived by local residents

P. IX How information & digital technology shapes the life of EI society

P. X MSME behavior and attitude toward digital technology

P. XII Recommendations for assistance programs

Eastern Indonesia (EI)1 is a region rich currently utilized within five spheres in natural resources and untapped of civic life: governance, education, potential in tourism sector.However, health, security & conflict management there has been a well-documented gap and business activities of MSMEs. between EI’s economic development We also offer a number of specific from the rest of Indonesia, as average and targeted recommendations for per capita income of EI is significantly future assistance programs to support lagged behind that of the national digitalization in EI. average. One of the main contributors is the digital divide due to the inequality In this study, we use a combination of access and ability to productively use of desk studies, field surveys, ICT facilities. Therefore, digitalization in-depth interviews and focus- is an important key in bridging this gap group discussions (FGD), as well as and promoting equitable and inclusive secondary data analysis. Our field 1 In a general sense, Eastern Indonesia (EI) growth, as it can lower entry barriers to surveys covered 2,000 respondents usually covers , Nusa Tenggara, economic activities. in 10 EI cities. Furthermore, we also Maluku and Papua. In this report, EI specifically refers to the ten cities located conducted another survey to 1,000 in the EI, in which we conducted the Under this context, we have conducted Micro, Small, Medium Enterprises field survey for our study. They include a study to identify the current situation (MSME) businesses to capture the , , , , of economic and socio-political MSME profile in EI, particularly with , , , Ambon, development of EI. Particularly, we regard to their behaviors and attitudes and . examine how digital technology is toward digital technology. VI Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia Life in EI, as shown by the indicators

Economic development situations. Most infrastructure, such as road and electrification indicators seem to confirm the generally-held (Table 2). Furthermore, EI is still suffering from belief in public that EI is still lagged behind the rest relatively underdeveloped health sector, compared of Indonesia in term of the development condition. to the national average (Table 3). Economic structure of EI is characterized by an underdeveloped manufacturing sector and a Socio-political situations. EI does show some dependency on natural resource-based sectors. encouraging signs with respect to the quality of EI’s income per capita in 2017 is only about two governance and public institutions. According to third of the national level, while EI’s average KPPOD (2016), six out of ten Indonesian cities with poverty rate is more than 1.5 percentage points the highest Local Economic Governance index are above the national average (Table 1). Compared located in EI (Table 5). However, due to the religious to the rest of Indonesia, EI is still falling behind and ethnic diversity of the region, EI is particularly in term of the availability and quality of physical prone to conflicts and violence (Table 6). VII Life in EI, as perceived by local residents

Public governance. In areas of public governance, due to the insufficient medical specialists, lack of our survey reveals that the general public in EI modern equipment, lack of opportunity for medical is calling for significant improvement in areas of professionals to improve their capacity and knowledge poverty reduction, job creation and corruption and their limited skills in using the technology. eradication. Digital technology, in particular, has large potential to provide a more efficient public Micro, Small, Medium Enterprises (MSME). Our complaints mechanism, as most of our respondents survey also captures the characteristics of MSME consider chat applications to be useful for in EI. The majority of MSME can be found in retail expressing public opinion or complaints. and trade sector, followed by the food and beverage sector. About 62% of MSME are micro enterprises Health services. Most respondents are fairly that only employ as many as 1-4 persons. Finally, the satisfied with the quality of basic public health most frequently cited obstacle for MSME to expand services, in term of building infrastructure, medical their activities is limited access to finance, as more staff and supporting facilities. However, more than 80% of respondents rely on personal and family sophisticated health services are difficult to perform funding sources. VIII Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia How information & digital technology shapes the life of EI society

Online behavior in EI. According to APJII (2017), Entertainments (music and videos) closely follow only 15% of 143 million Indonesian internet users behind, while commerce-related activities such as are located in EI. In our survey, about half of our shopping and trading are among the least frequently EI respondents are internet users, while the performed activities. other half are not. Our survey reveals that 88% of respondents access the internet from their Lack of public awareness remains an issue. The smartphones. Furthermore, more than 40% of our utilization of digital technology for public services respondents find issues with internet stability, delivery in EI has already existed in one form or another. speed, price and coverage in EI. Social networking The main issue here, however, is about the lack of and news consumption are the two most frequently public awareness that certain public services can be performed online activities by our EI respondents. accessed online. Only about 42% of respondents are IX

aware of the online presence of such services. Another issue is the lack of innovation by local governments, who lack the digital knowhow to adjust various existing online systems to serve local needs.

The necessity for further development of public online % system. Most of our respondents have a favorable perception toward the use of digital technology in 88of our survey respondents access government institutions for it makes their civic lives the internet from their smartphones easier. However, plenty of respondents (about 60%) are also calling for a more comprehensive system, as the current state of online system still inconveniently requires them to physically go to public offices for some other parts of the online application. Most of our The main challenges of public services digitalization respondents in EI. Furthermore, as many as about 40% of respondents are not even aware of the existence have a favorable of online platforms to communicate with local perception toward government, such as 24/7 Call Center, government website or social media. For the purpose of effective the use of digital public communication and feedbacks, both local technology in government websites and social media have massive room for improvement as many of them have not government been updated for years. Our various findings imply the three most pressing challenges facing EI local institutions for it government regarding public services digitalization, makes their civic which include (a) lack of capacity and competence of local human resources, (b) lack of dedicated lives easier. personnel in charge of updating the contents and (c) lack of sustainable financial resources.

The use of digital technology for supporting public More than services in education and health. Public and government services would not only benefit from more intensive use of digital technology in administration and community participation, but also from the % application in education and health. The public in EI affirms the beneficial effect of digital technology for supporting education process and overcoming public 40of our respondents find issues with health issues. The technology facilitates more effective internet stability, speed, price and queries of information and closer communications coverage in EI between teachers and students, or between health practitioners and public. While the survey shows that public has used internet to find and to discuss those two issues widely, our in-depth interview, however, reveals that the local governments have not intensively The public in used the technology to disseminate information related to education and health programs and issues. EI affirms the

The use of digital technology to counter false beneficial effect of information. We also explore the possibility of using digital technology digital technology to prevent conflict and maintain public order in the survey. 39% of our respondents for supporting agree on the use of technology to report or monitor the education process potential of conflict in order to act as an early-warning system. Still another 33% call for the use of technology and overcoming to counter hoaxes. A prime example is found in Ambon, public health issues. where some people have taken to Facebook to promote ‘positive news’ to counter false information that could potentially lead to a new conflict. X Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia MSME behavior and attitude toward digital technology

Low degree of internet utilization for business in EI. to-face way of doing business. Therefore, improving Our survey and interviews find that the use of digital the digital literacy of both seller and buyer is of the platforms by MSME for business purposes in EI utmost importance. has not been very extensive, and limited mostly to marketing. On average, only about 30% of our MSME Promising local digital initiatives have been taking respondents use the internet for their business place. Despite the generally scarce use of internet processes. One of the most obvious obstacles for among MSME, EI is also home of several promising local businesses to go online is the poor internet quality digital initiatives. In Manado, an internet community (i.e. accessibility and reliability) in EI. Another has been actively promoting local tourism by producing important reason is the fact that majority of our videos and reviews of tourist attractions using social respondents either believe that using internet for media. In Makassar, a local e-commerce platform business consumes too much of their time or that known as makassarberdagang.com publishes job they have no idea how to operate the internet. Lack opportunities and offers capacity building activities for of customers’ internet literacy in EI is also another sellers and buyers (including online marketing advices), big issue, as they tend to prefer a conventional, face- to the benefit of local MSME. XI

Social media are preferred by MSME as marketing address them personally through email, phone calls tool. Local MSME in EI tend to overwhelmingly or private messaging. Another benefit for MSME (80%) prefer social media, rather than other online of using social media for marketing purpose is the platforms like e-commerce, as their marketing possibility to conveniently showcase their products tools. The often cited reason is the fact that social and communicate with potential customers. media facilitates an easier and safer way of handling Facebook, WhatsApp and Instagram are the three complaints, as business owners can directly most popular marketing platforms for MSME in EI. For example, an operator of a bridal (wedding salon) in Palu acknowledges her use of Facebook and Instagram for showcasing and marketing her place and services. Social media The lack of capacity and literacy as obstacles for facilitates an online business activities. In addition, our survey easier and safer also seems to confirm that issues of capacity and literacy have been the main stumbling blocks of the way of handling development of technology in EI. Most respondents complaints, as who do not use social media for their businesses are not sure about its effectiveness to promote business owners their products (40%), while another 33% have no knowledge on how to operate the social media. Some can directly address capacity-building programs in EI have been initiated them personally to solve this fundamental problem. Two prominent examples are Kampung Digital (supported by PT through email, Telkom) in Kendari, which provides digital equipment phone calls or and Wi-Fi to support local online businesses, and Jago Jualan in Gorontalo, which holds regular private messaging. meetings, training sessions and workshops to enhance its local members’ knowledge of online marketing strategies in social media. XII Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia Recommendations for assistance programs

In formulating an effective programs, policymakers should take the following four considerations into account when formulating assistance programs to support digitalization in EI:

• Each city has a unique condition and context, and therefore, should be considered separately from each other. Different cities might require different type or level of programs • Proposed programs can potentially support and enhance the currently existing digital-related programs initiated by local governments. • Proposed programs should consider engaging the already existing local online communities • Proposed programs may be targeted to support local village enterprises (Bumdes). XIII

With that in mind, we believe that the following three areas of assistance can support further process of digitalization of EI:

(1) Capacity building programs

Capacity building activities are the most important For government officials, basic workshops on aspect of the assistance programs, given the digital technology should be complemented with severely lacking public awareness of digital technical and hands-on trainings aimed to develop technology in EI and should be specifically targeted and maintain simple platforms to deliver and to three different local stakeholders: (a) government support various government programs. officials, (b) local public service workers and (c) local businesses and MSME. Finally, intermediate technology users could benefit from more advanced trainings to develop First, local communities in EI could benefit from specific skills of using social media or online workshops or seminars, intended for a large, platforms to support their activities, e.g. a training general audience, that are designed to provide on developing online teaching materials for local basic general knowledge of the potential benefits educators, on online marketing for MSME, or on of digital technology in their respective areas (i.e. photo or video-editing in regions with famous for public services delivery, for online marketing or tourist destinations. promotion of MSME, etc).

(2) Development of online platforms

In addition to capacity-building, assistance local needs. A potential example is the development programs may also involve projects to develop online of social media pages for technical offices of local platforms, that are designed to specifically cater to government.

(3) Facility development

Finally, given the lacking digital infrastructure in EI, as public Wi-Fi, particularly in areas with big tourism assistance programs can be complemented by the potential. This can be done with the collaboration development of digital facilities in public areas, such with local government or related service providers. 1 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia Ch.01 IntroductionIntroduction Despite its abundance of natural resources and massive potential in tourism, there has been a noticeable gap between EI economic development from the rest of Indonesia. One of the main contributors is the digital divide due to the inequality of access and ability to productively use ICT facilities.

he EI covers 13 provinces2 with an area of 92 million hectares (land and sea). The Central Statistics Agency (BPS) estimates the population in this part of Indonesia to be 30 million people with more than 50 percent under 30 years of age. EI is a region rich in natural resources in agriculture, fisheries, livestock, forestry and Tmining. Additionally, it has untapped potential in the tourism sector along with well-known tourist spots such as Lombok, Komodo Island and Raja Ampat. Thus, why is there a gap between economic development in the EI and the rest of Indonesia?

A possible reason is that the EI is somewhat underdeveloped and trapped in low investment compared with other regions of Indonesia. The fact is, in general, people in EI generate less per capita income compared with those living in western Indonesia.3 This is also reflected in the high number of poor people in the region with three of the poorest provinces in Indonesia located in the EI, East Nusa Tenggara (NTT) with a poverty level of 21.38 percent, Papua (27.76 percent) and West Papua (23.12 percent). Moreover, physical and non-physical infrastructure is not evenly distributed throughout the region so that expected economic growth does not reach all residents. Except for , North Sulawesi and South Sulawesi, all regions in EI also still lag behind the national electrification rate. No wonder then that this unequal infrastructure distribution creates high infrastructure costs and exacerbates economic stagnation and low- income levels in the region. 2 Bali, West Nusa Tenggara, East Nusa Tenggara, North Sulawesi, Central Sulawesi, South Sulawesi, , West Sulawesi, Gorontalo, One of the major drawbacks in EI is a lack of infrastructure especially in Maluku, North Maluku, Papua and West Papua information and communications technology (ICT). One of the most awaited 3 https://www.adb.org/sites/default/files/ infrastructure projects is the Palapa Ring Project. This aims to build a national publication/229411/adbi-wp667.pdf fiber-optic cable network all over Indonesia with 13,000 kilometers undersea 4 The Kuznet curve connects inequality and as well as 22,000 kilometers onshore. The project will provide a fast broadband economic growth. It explains that at the early stage of development there is high inequality and internet that can be enjoyed by all cities and districts in Indonesia and hopefully high economic growth, while at a later successful help to reduce the potential impact of unequal digital economic development, development stage there will be low inequality and the so-called digital divide in Indonesia. high economic growth. In EI the variation of coupling and decoupling between inequality and economic To achieve more inclusive and equitable economic development, the inequality growth signals that development in these areas does not follow the “standard” growth pathway—which is a problem in Indonesia needs to be addressed. In other words, there is a coupling cause for concern. between inequality and economic growth in some areas, and decoupling 2

between inequality and growth in other areas4. Different impacts of economic development in one city/municipality from other cities in this part of the country add to the already high conflict potential resulting from religious, ethnic and racial differences in this particular area. This signals a need for affirmative intervention programs to enable the EI region to closely follow the direction of the socio-economic development pathway of the rest of Indonesia. Some of the origins of these development disadvantages are inadequate basic infrastructure, a lack of investment and low levels of education.

1.1 Background The literature on digital economy establishes that digitalization can expand opportunities for wealth creation and inclusive growth since it can lower entry barriers (Pangestu & Dewi, 2017). For example, by participating in online trade, micro, small and medium enterprises (MSMEs) can reduce the need to invest in an expensive physical storefront and marketing costs, while still being able to reach a larger pool of potential customers. However, Indonesia can only take advantage of the digital economy to promote equitable and inclusive growth if we address the issue of the digital divide, which refers to inequality in accessing and ability to productively use ICT facilities–such as computers, laptops and smart phones to access the internet. (Pangestu & Dewi, 2017). According to the Socio- Economic National Survey (BPS 2016), there is an unequal level of internet penetration, unequal quantity (time spent accessing the internet), and quality (purposes of accessing the internet) of internet usage.

This situation calls for a greater contribution, not only from the Indonesian government, but also from many other parties, including the private This study explores sector, and in particular internet-based companies such as Facebook. As the providers of many the socio-political internet-based services, those companies are in a and economic good position to provide assistance and to increase digital literacy in EI. context and potential of 10 According to the current situation and potential of digitalization for Indonesia’s socio-economic EI cities, and growth, the Centre for Strategic and International Studies (CSIS) proposed a study to identify the identifies some economic growth potential of various cities in EI as challenges and well as the use of the digital economy to support that. Specifically, we will assess local government recommendations capacity and readiness to partner in helping its for digitalization residents take advantage of various online business models. Based on the data we gather from the programs in EI. study, we will provide recommendations to assist implementation of effective programs related to the use of the digital economy. 3 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

10 EI cities with sizeable potential for digitalization programs were selected in this study based on indicators of economic potential, governance, infrastructure and socio-political aspects.

Given the aforementioned economic development challenges and the potential benefits in using digitalization to promote inclusive and equitable growth, the objectives of this study are to support assistance programs in the future. We elaborate as follows: 1. To provide assessments of city-level economic and socio- political contexts in the EI region 2. To identify gaps between economic potential and current economic conditions, while assessing what are the challenges and opportunities for Facebook in implementing its programs 3. To identify the intended impacts of program implementation in EI

1.2 Methodology We began by selecting 10 priority cities included in the study. We then conducted an assessment of pre-existing conditions to give a strong background for the program for each city. The goal was to assess key sectors, opportunities and challenges. The approach included desk studies, field surveys and also in-depth interviews and focus-group discussions (FGDs). Later on, we identified the intended impacts of possible assistance programs and finally came up with a set of implementable recommendations.

From 13 provinces, we used four main indicators that captured economic and socio-political aspects in each city to identify its readiness and potential for the digital economy. We only assessed the capital cities of each province for two resons. It was easier for the program implementation since in these cases, the capital city already had adequate infratructure and a potential market. The second was related to the cities special position as provinces capitals, which would allow positive spilover effects to other areas of the provinces. We later excluded Bali as it has different 4

Figure 1 City Selection Process

Economic Social- Governance Infrastructure Potential Political

• Regional • Transaction • Quality of road • Peace GDP Growth cost • Quality of & Conflict • Human • Gov’t capacity sanitation Resolution Development & integrity • Political Index Growth • Local Fragmentation • Population regulation Growth quality • Local gov’t interaction with businesses

Makassar Kendari Mataram Manokwari Gorontalo Manado Jayapura Kupang Ambon Palu

Source: CSIS Jakarta

characteristics and a more advanced economy. Finally, (West Sulawesi) and (North Maluku) did not make the cut because they are relatively new provinces so it might be difficult to implement the program.

The four indicators were economic potential, governance, infrastructure and socio-political aspects, which would be translated in the sub-indicators. The figure below illustrates the selection process and prelimenary assessment of each city from secondary data. Chapter 2 provides a more comprehensive discussion of the cities’ socio-economic conditions.

Desk Study: Economic and Social-Political Condition Based on the selection of cities, we perfomed a literature review and a data-gathering exercise to understand the current level of development, both economic and socio-political, in EI and the selected cities, in general. The economic part of the study focused on how the program could help the cities to address the inclusive-growth problems, while the socio-political aspect covered education, governance, conflict management and local political aspects of the cities. This step relied on secondary data and past literature. We also explored the regulatory environment that promoted or hampered inclusive growth in cities in EI.

Survey To complement the study, we also conducted a survey of the general public in the region. This was designed to get information on access to the internet and technology; how technology was used and its frequency; what were the obstacles; degree to which technology had been used to support good governance; the use 5 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

We combine analysis from desk-study with local insights from focus group discussions (FGD), in-depth interviews and field surveys to both general public and MSME in the 10 selected EI cities, from which we gathered information regarding the use of technology for public services and business purposes in each of the cities. 6

Figure 1 City Selection Process

Local Population PDRB No Provinces Capital Cities Economy HDI Growth Growth Growth Index5

1 Gorontalo Gorontalo 78.76 0.80% 7.42% 3.19%

2 Central Sulawesi Palu 73.12 2.16% 6.11% 0%

3 South Sulawesi Makassar 72.67 3.90% 7.98% 0.74%

4 Southeast Sulawesi Kendari 72.13 3.45% 9% 0.28%

5 North Sulawesi Manado 71.71 0.53% 7.10% 0.34%

6 Maluku Ambon 71.71 3.96% 5.90% -0.01%

7 East Nusa Tenggara Kupang 66.67 2.83% 6.74% 0.06%

8 West Papua Manokwari 65.4 2.60% 7.49% 0.61%

9 West Nusa Tenggara Mataram 55.33 1.06% 8.06% 0.90%

10 Papua Jayapura 54.73 1.95% 7.20% 0.65%

Source: CSIS Jakarta 5 The index comprises government, infrastructure and socio-political indicators. Please refer to Table 5 for more specific indicators for each sub-indicator

of technology in political education; peformed by well-trained surveyors the role of technology in conflict with respondents. management and so forth. The survey covered 2,000 respondents FGD and In-depth interviews distributed proportionally in 10 We also conducted FGDs in each cities in EI. The population sample city. These involved 10 participants, was Indonesian citizens residing in comprising business people, local the targeted cities that held ID (KTP) government officials, legislators, cards. local education officials, teachers, academics and NGO staff. The aim In addition to the general public of the FGDs was to explore further survey, 1,000 MSME respondents the issues and findings that were not were selected in the 10 cities. This captured through the survey. particular survey was intended to capture the MSME profile in EI with We then selected 10 informants for regard to behavior and attitude in-depth interviews in each cities. toward digital technology, the use The interviews gave more space for of digital technology in MSMEs for the CSIS to explore in-depth crucial business purposes (sales, marketing issues that related to the economic, and promotion) as well as to facilitate social and political dimensions of MSMEs’ ways of doing business digital penetration for economic (licensing etc). growth. The selected informants were local government staff, police The sample was selected through personnel, religious and society multi-stage random sampling. The leaders, students, “ordinary” people, data collection was conducted IT company and telecommunications through face-to-face interviews staff and so forth. 7 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Ch.02 Socio-EconomicSocio-Economic ConditionCondition inin EIEI 8

Table 1 Macroeconomic Indicators for EI and Rest of Indonesia, 2017

Indicators EI Rest of Indonesia Source

GRDP (percent yoy) 5.1 5.07 BI, BPS

GRDP per cap (Rp mn) 35.3 51.9 BPS

Inflation 3.4 3.61 BI, BPS

Unemployment (percent) - open unemployment 4.43 5.50 BPS

Gross Capital Formation (percent yoy) 4.50 6.15 BPS

Foreign Direct Investment (US$ mn) 9,970 32,228 BKPM

Domestic Direct Investment (Rp bn) 49,226 261,690 BKPM

Poverty rate (percent) 11.72 10.12 BPS

his section provides summary findings of the study into the prevailing situation in EI. We looked at several statistics and indicators to give a general picture of the region on socio-economic and socio-political issues. It is followed by a discussion of our findings from surveys Tand field research. Understanding the existing conditions is crucial to understanding the needs of society in EI and how the application of digital technology might help. It also helps in designing appropriate assistance programs. EI’s economic structure 2.1 Socio-Economics Indicators is characterized by EI has a number of characteristics that increase the vulnerability an underdeveloped of the region. First is the dependency on natural resource-based sectors, especially agriculture and mining, with a total share of manufacturing sector about 33 percent of the GDP of EI. Second is the underdeveloped and a dependency on manufacturing sector. It is dominated by agriculture-based products using low and lower medium technology, coupled with natural resources. EI’s poor capital expenditure. income per capita in This economic structure poses sustainability risk of EI’s economic 2017 is only about two growth. The export performance of EI is vulnerable to the movement of commodity prices in the world market and global demand. Large third of the national reliance on the agriculture and mining sectors tends to create level, while EI’s average volatility in economic growth. This is shown from the region’s economic growth in the last five years, where economic growth is poverty rate is more highly dependent on performance in the mining and processing of than 1.5 percentage mining products. As an illustration, economic growth in Papua in several quarters in 2015 grew by double digits, but in the next two points above the quarters of 2016, it suffered negative growth. national average. Table 1 below shows the economic development of EI, which is relatively underdeveloped. Per capita income level is much lower than the national average (Rp 35.3 million vs Rp 51.9 million). Investment also shows a lower level than the Indonesian average.

Since 2014, the government has pushed through more equitable economic development in Indonesia. Physical infrastructure development projects in EI are prioritized for implementation. Data from the Public Works and Housing Ministry show about 60 9 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Compared to the rest of Indonesia, EI is still falling behind in term of the availability and quality of physical infrastructure.

percent of its infrastructure budget (Rp 42.14 trillion) in 2017 was allocated to EI. A total of Rp 6.12 trillion was used for road construction on the Indonesia-Malaysia border along , development of the trans-Papua (Wamena-Hatem-Kenyam-Batas-Mamugu) highway and expanding the Manokwari-Maruni road.

More than half of the provinces in EI are listed as having fewer viable roads than the already low national average (only 45.1 percent roads in decent condition). Another indicator is the electrification ratio. Some provinces such as West Papua and NTT have electrification ratios of only about 50 percent. The low availability and quality of physical infrastructure in EI has caused the isolation of the area and has resulted in higher prices, which contribute to the high levels of poverty. Regional tourism potential also cannot be utilized optimally either, since the infrastructure for visitors is insufficient.

Table 2 Infrastructure (Electricity, Ports, Airports), EI vs Rest of Indonesia

Number of Number of Total Electrification Total number Province international commercial number Ratio of airports airports ports of ports

NTB 77.22 1 4 3 15

NTT 58.93 1 16 6 64

North Sulawesi 91.31 1 5 3 43

Central Sulawesi 89.11 0 7 3 32

South Sulawesi 92.09 1 8 4 41

Southeast Sulawesi 74.47 0 6 1 37

Gorontalo 87.66 0 2 1 5

West Sulawesi 80.06 0 2 0 12

Maluku 87.12 1 14 2 67

North Maluku 98.06 0 12 2 70

West Papua 47.78 0 23 3 28

Papua 88.24 3 82 3 27

Indonesia 91.16 28 289 108 743

Source: BPS 10

Table 3 Education and Health Indicators, EI and Rest of Indonesia (2017)

Share of Share of Share of household Average years of Net enrollment Province toddler with underheight with access to proper schooling rate - primary malnutrition* toddler* sanitation

NTB 6.79 98.13 20.2 30.0 69.25

NTT 7. 0 2 95.40 28.2 38.7 45.31

Sulawesi Utara 8.96 94.46 7. 2 21.2 71.93

Sulawesi Tengah 8.12 92.75 24.2 32.0 61.12

Sulawesi Selatan 7.7 5 97.49 25.1 35.6 76.73

Sulawesi Tenggara 8.32 96.62 15.8 29.5 69.52

Gorontalo 7.1 2 97.54 22.3 33.0 58.75

Sulawesi Barat 7.1 4 95.51 24.7 39.7 59.48

Maluku 9.27 95.50 24.2 28.9 63.29

Maluku Utara 8.52 97.01 17.0 24.6 66.18

Papua Barat 7. 0 6 93.58 23.3 30.2 65.30

Papua 6.15 78.83 15.1 27.9 33.06

Indonesia 7.95 97.19 17.8 27.6 67.89

*The most recent data is for 2016, from Ministry of Health

Table 4 Poverty Indicators (2017)

Poverty Poverty Gap Poverty In addition to physical infrastructure, the government Province headcount Index Severity Index also needs to pay attention to non-physical infrastructure such as health and educational NTB 15.05 2.63 0.63 services in EI. Various indicators show a low level of

NTT 21.38 4.16 1.17 health and education, which in turn lead to greater economic imbalances and an increased number of North Sulawesi 7.90 1.30 0.30 poor people in the region.

Central Sulawesi 14.22 2.80 0.78 In education, the situation in EI is not that bad. The South Sulawesi 9.48 1.92 0.50 government support for the nine-year compulsory education program and a 20 percent commitment in Southeast Sulawesi 11.97 2.09 0.52 the state budget (APBN) each year mean education Gorontalo 17.14 3.31 0.85 indicators in EI are not much different from the national average. The healthcare sector shows West Sulawesi 11.18 1.81 0.45 a different picture. The number of malnourished

Maluku 18.29 3.41 0.89 children in some EI provinces is higher than the national average. Similarly, the number of households North Maluku 6.44 0.81 0.15 that have access to proper sanitation is still very low.

West Papua 23.12 7.41 3.12 The level of poverty in EI is still quite high with the Papua 27.76 6.25 1.93 poorest three provinces in Indonesia located within EI. Table 4 below shows three provinces, Papua, West Indonesia 10.12 1.79 0.46 Papua and NTT have the highest number of poor

EI 12.16 2.40 0.69 people, far higher than the national average.

Source: BPS 11 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

2.2 Socio Political Situation Socio-political conditions in EI vary greatly given Furthermore, Makassar is the provincial capital the diversity of the region. Potential conflicts whose performance in interaction between local always exist due to religious, ethnic and other government and business actors was considered differences. However, some areas have very good the best. Two other cities, namely Gorontalo and local government institutions to deal with these Palu have their own achievements. Gorontalo issues. The table below shows a summary of the is the provincial capital that has the best 2016 Committee Monitoring the Implementation of private business development program while Regional Autonomy (KPPOD) report on government Palu is deemed as the provincial capital where institutions in EI in 10 selected cities. transaction costs and access and legal certainty in land ownership/acquisition are the best. The Local Economic Governance (LEG) Index shows that several provinces in EI have achieved a high Provinces in EI are committed to making LEG performance. Of the 10 best provinces, six competitiveness improvements. With the are located in EI namely Gorontalo (2), Palu (5), improved institutional capacity and the Makassar (6), Kendari (8), Manado (9) and Ambon development of physical infrastructure, they are (10). Other indicators, such as the quality of local trying to catch up with economic developments regulations / Perda show that Manado is the best in western Indonesia, including reducing poverty provincial capital. and economic inequality in their provinces.

Table 5 Summary of KPPOD Survey of Provinces (2016)

Local Security Local Economic Labor Province Licensing Infrastructure & Conflict Regulation Ranking Governance Issues Resolution Quality Index

Gorontalo 78.76 83.14 77.01 95.24 65.98 46.36 2

Palu 73.12 76.53 60.39 88.71 58.13 61.62 5

Makassar 72.67 87.42 27.00 99.84 68.19 35.59 6

Kendari 71.13 80.66 53.33 99.89 49.65 90.10 8

Manado 70.70 90.05 59.49 88.56 55.31 100.00 9

Ambon 68.46 81.06 61.59 58.01 74.95 91.59 10

Kupang 66.67 84.67 51.61 47.43 36.22 38.17 12

Manokwari 65.40 88.70 79.67 66.64 46.55 16.82 13

Mataram 55.33 96.88 67.38 93.61 53.17 81.60 25

Jayapura 54.73 35.51 69.13 87.24 33.33 32.81 26

Banjarmasin 64.53 84.73 82.75 72.04 22.25 47.59 15

Denpasar 58.04 80.91 51.30 96.97 41.06 25.22 22

Sofifi/ 56.86 75.30 24.16 100.00 33.45 84.42 23

Mataram 55.33 96.88 67.38 93.61 53.17 81.60 25

Jayapura 54.73 35.51 69.13 87.24 33.33 32.81 26

Average Indonesia 63.29 74.73 60.68 89.19 49.31 64.95

EI 66.60 81.66 63.42 85.88 49.57 58.62

Note: Local Economic Governance Index is calculated by comprising 10 perception indexes from KPPOD Source: KPPOD Survey on the particular year. The 10 variables are business perceptions 1. licensing, 2. transaction costs, 3. land access, 4. interaction between local government and businesses, 5. private sector development program, 6. local heads capacity and integrity, 7. infrastructure, 8. security and conflict resolution, 9. labor issues and 10. regulations 12

Table 6 Election Vulnerability Index, 2017

Provinces Vulnerability Index

Papua 3.41

Maluku 3.25

Southeast Sulawesi 2.81

North Maluku 2.71

NTT 2.70

NTB 2.54

South Sulawesi 2.53

Bali 2.19

Source: Bawaslu

Six out of ten Indonesian cities with the highest Local Economic Governance index are located in EI. However, due to the religious and ethnic diversity of the region, EI is particularly prone to conflicts and violence.

In addition to the KPPOD data, it is also crucial to look at the state of political affairs in the regions. This year, Indonesia has hold concurrent local elections in 171 regions. Of these 171 elections, 17 elections have elected governors in 17 provinces and the rest have been carried out to pick city mayors or regents. We note that six out of 11 provinces in EI have geared up for these gubernatorial elections. We summarize the so-called vulnerability index of elections in the eight provinces in EI (see Table 6) based on data from the Election Supervisory Board (Bawaslu).

According to Bawaslu, the vulnerability index includes a number of potential factors that may impair the election processes. There are 30 indicators to measure the index such as the integrity of the local election commission (KPUD), the existence of conflict among candidates and their supporters, the quality of voter database, etc. Bawaslu grades the index based on the following order: score 0 to 1.99 for a low vulnerability region; 2 to 2.99 for medium vulnerability, and 3 to 5 for high vulnerability. 13 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

As demonstrated in the table, Papua is the most vulnerable province in the eastern part of the country. Coupled with Maluku, the two provinces are classified as highly vulnerable regions. The other four regions, namely, Southeast Sulawesi, North Maluku, NTT, NTB, South Sulawesi and Bali are followed in respective order and are classified as medium vulnerability.

Another interesting factor lies in the degree of violence in the eastern regions. It is widely argued that the less developed regions are more prone to violence than more developed ones. How true is this hypothesis for our study? To examine this question, we looked at data from the National Violence Monitoring System (MVNS). These data list the total number of incidents for many types of violence occurring in Indonesia from 1998 up to the present. However, the most complete data that cover all provinces are only available in the year 2014. We screened the data for 11 eastern provinces only (Figure 2).

North Sulawesi was the most violent province in 2014 with 1,664 incidents, followed by Papua (1,435) and South Sulawesi (1,224 incidents). It is evident that the number of violent incidents in these three provinces far outstrips the other seven provinces. Whereas the least two provinces in terms of violence were West Sulawesi and Gorontalo.

Figure 2 Number of Violent Incidents (Deaths, Injuries, Rapes, Kidnappings, Buildings Damaged)

200

150

100 Number of Incidents of Number

50

0 11/2014 07/2014 01/2014 10/2014 12/2014 09/2014 03/2014 05/2014 08/2014 06/2014 02/2014 04/2014

Month

Maluku Nusa Tenggara Barat Sulawesi Tenggara Sulawesi Tengah Nusa Tenggara Timur Gorontalo Papua Barat Sulawesi Utara Sulawesi Barat Papua Sulawesi Selatan

Source: NVMS 14

Figure 3 Government Performance in Providing Public Services Capable Not Capable DK/DA

78,4 80,5 77,2

58,1 54,7 56,7 43,6 39,4 40,3

20,2 18,1 21,2

1,4 1,4 1,8 2,6 3,0 1,6

Provide access to Provide access to Alleviate poverty and Provide job Eradicate corruption Creating a secure education affordable health care inequality employment and illegal fees, environment in the particularly in society government offices Source: CSIS Survey, 2018

2.3 Socio-Economic Situation in EI: Findings from the Survey 2.3.1 Public Service Consultation & Administration In general, respondents in the 10 cities we surveyed showed high satisfaction levels with governance. The aggregate result of 10 Figure 4 Public Opinion and Complaints In EI cities shows that 80 percent of respondents are satisfied with the performance of local government, while the satisfaction level with Public’s Experience Expressing Opinions or local representatives is slightly lower at 66.2 percent. This high Complaints to the Government (Have Ever) satisfaction is also shown at the community and village level. Effectiveness of various mechanism (Useful)

Public satisfaction with local government’s performance can be translated into the ability of the government to provide public 23.5 services and execute development plans. The public in the 10 cities Social Media of EI where we conducted our study believes that the government 75 has been able to provide education, health and security services Chatting Apps 34.4 of appropriate standards, but is still weak in its efforts to reduce e.g BBM poverty and create jobs. The government’s ability to reduce the & WhatsApp 83 level of corruption is also considered less than optimal (Figure 3). In general government performance is determined by leadership, 14.6 Face to Face quality of state apparatus, work methods and technology. 87

Our survey reveals that most of the people (76.5 percent) have never Telephone/ 7.4 filed complaints. A majority of them are pessimistic about their SMS 64.9 opinions being heard by officials or responded to. That is also the reason why out of those who do voice their opinions or complaints Demonstration 77.4 to the government, a majority of them still use direct means of Protest 79.3 communications or face-to-face (14.6 percent). Other means are phone calls/text messages, social media and government websites. 10.7 Interestingly, chat applications are deemed to be quite useful for Gov’t Website voicing opinions and complaints (Figure 4). 73.5

From the six medium that were used to file complaints or opinions, demonstration was widely used (77.4 percent), and followed by Source: CSIS Survey, 2018 chatting applications (34.4 percent) and social media (23.5 percent).

Meanwhile from its effectiveness, face to face interaction was seen as This is consistent with our interviews and FGDs. Face-to-face and the most effective (87 percent) to voice complaint even though from its direct communication is still considered the most appropriate frequency only 14.6 percent respondents ever used such mechanism. method to submit complaints, especially for a society where In general, above 70 percent of the respondents stated that the technology has not been part of daily life. People argue that if their mechanisms provided to voice opinions and complaints are effective. complaints are not delivered directly, they tend not to be addressed. 15 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

More sophisticated health services are difficult to perform in EI due to insufficient number of medical specialists, lack of modern equipment, lack of opportunity for capacity building of medical professionals and their generally limited skills in using the technology.

2.3.2 Public Service in Education and Health in EI Education is very important in improving the capacity Figure 5 Assessment of Education Quality of human resources in society. It is even more important in the current digital era, where the public needs certain levels of knowledge and skills to utilize digital technology optimally. A lack of high-quality 59,8 education might hinder the development and use of 28,8 digital technology in various livelihood aspects. Material / School Curriculum 4,4 Our survey reveals that the majority of respondents believe that there are improvements in the quality of 7,0 education. In terms of material/school curriculum, 59.8 percent stated that it is getting better, while 28.8 percent of respondents claim that it has not changed. Meanwhile 60.6 percent of the 60,6 respondents believe that the quality of teachers has improved. Finally, 58.9 percent of respondents 30,4 Quality of also state that school infrastructure is in a better teachers condition (Figure 5). 3,4

5,6 Health care is also an important pre-existing condition for the optimal utilization of digital technology. Although it less directly affects human- resource capacity and knowledge compared to education, better health is necessary to maintain the 58,9 ability to perform social and economic activities. 30,0 School The survey reveals that the majority of respondents infrastructure 5,3 (75 percent – 85 percent) in the 10 cities are of the opinion that quality health services in terms of 5,8 building infrastructure, health staff and supporting facilities are available and sufficient. Except for Manokwari, which only has 34 percent satisfied with health services in the city, a majority in the 10 big Getting better Getting Worse cities in EI is quite happy with health provision in their Source: CSIS Survey, 2018 Same condition Don’t Know cities (Figure 6). 16

2.3.3 Security Situation Figure 6 Assessment of the Quality of Health Services A conducive environment is needed for effective policy implementation. In that case there needs to be a stable environment with an absence of conflict, both vertical and horizontal. From 81,6 78,8 78,7 the observation in 10 cities, a majority of the respondents argue that they feel safe (52.7 percent) and extremely safe (28.3 percent) in the cities in which they live in. Meanwhile, 17.5 percent argue that their cities are not safe. People in Ambon have the highest perception that their city is safe (64.3 percent) while 41.7 percent of people in Jayapura argue that their city is not safe. Despite a past history of religious conflict in the 1990s, the local government in Ambon has made significant progress in maintaining peace and stability in the city. Meanwhile maintaining security has always been an issue in Papua and more specifically in 19,5 19,5 Jayapura. Papua is known for multi-dimensional 16,8 types of conflict.

The breakdown of security elements shows that 1,7 1,8 1,8 conflict among society, or horizontal conflict, is the most predominant (74.5 percent) in the 10 cities, followed by local government and society conflict Clean and well Sufficient Health Sufficient supporting maintained building Staffs facilities (10.1 percent). The most common cause of conflict is because the government does not implement policies as promised (15.6 percent), followed

Source: CSIS Survey, 2018 Yes No Don’t Know / No Answer by causes related to poverty and injustice (13.8 percent) and land issues (12 percent).

Maintaining security in EI has always been an issue in EI, specifically in cities known for multi- dimensional types of conflict. Our survey finds that horizontal conflicts (i.e. conficts between societies) is overwhelmingly the most frequent type in EI. 17 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

2.3.4 Economic Situation From the economic point of view, this sub-chapter shows (34.2 percent) and household level (37.2 percent) are the general perception of respondents in the 10 cities deteriorating. Meanwhile, Jayapura is the city with related to the economic situation, both at the city and the lowest proportion of respondents (15.6 percent) household level. The economic issues discussed during who say employment and job opportunities are getting the survey were focused on four main areas, such as worse at the city level. Policy synergy and coordination general economic and welfare conditions, employment, between the national and local governments in opening business opportunities and public service delivery in the new employment opportunities should be improved and context of economic equality. The discussion also included strengthened to accommodate the employment needs the development of MSMEs in EI and their business in Indonesia, especially in EI. environment. A similar pattern can be observed in the case of business Based on the CSIS survey, the majority of respondents who opportunities. Most of the respondents claim that there live in the 10 cities feel that the economic and social welfare is no significant change in the situation compared to conditions in their city remain unchanged compared to three years ago. Around 45 percent of respondents feel three years ago. Around 53 percent of the respondents that there is no change in business opportunities, while feel that the economic conditions are the same, while 33.9 29.6 percent perceive that the situation is getting better percent of them think that the economic situation in their and 10 percent thinks that the situation is getting worse. cities is getting better compared to three years ago. Only The highest percentage of respondents who state that 9.7 percent of the respondents believe that the economic business opportunities are getting better is in Manado and welfare conditions are getting worse. (43.2 percent), while the lowest is in Manokwari (18.4 percent) and Ambon (20.5 percent). The public perception of employment and job opportunities in the 10 cities is similar to the perception of the economic The study also attempted to capture the issue of situation. The majority of respondents (51.6 percent) think economic inequality and public service delivery, e.g. food that employment and job opportunities are the same security assistance, social protection, in the 10 cities. compared to three years ago. Moreover, 21.6 percent of the On average, 52 percent of the respondents believe that respondents feel that employment and job opportunities the government efforts to reduce economic inequality are getting better, while the same percentage believes the as well as efficiently delivering public services have situation is getting worse. not resulted in a positive outcome. Only 21.1 percent of the respondents feel that economic equality and public Manado has the highest number of respondents who service delivery are getting better, while 14.7 percent feel employment and job opportunities, both at the city think that the situation is getting worse. Manado is

Figure 9 Economic and Welfare conditions: City and Household Level Getting Better Same Condition Getting Worse Don’t know

70.0

60.0 61,3 60.0 59,0 50.0 57,5 53,5 53,0 52,0 50,5 48,0 40.0 47,7 45,5 42,2 30.0 39,5 36,0 35,0 34,2 34,0 33,9 31,5 28,0 20.0 27,1 26,0

10.0 13,5 12,0 9,7 12,0 9,6 9,6 8,0 8,5 10,0 7,9 0.0 5,5

10 cities Makassar Palu Kendari Manado Gorontalo Mataram Kupang Ambon Manokwari Jayapura

City Level Source: CSIS Survey, 2018 18

among the cities where people are confident in the current government’s efforts to solve the issue of economic inequality and public service delivery, with 33.7 percent of respondents in Manado arguing that the situation is getting better. Manokwari and Ambon have the lowest perception of their government on this issue, with 13.7 percent and 16 percent, respectively, saying that the situation is getting worse.

The survey also reveals that most of the respondents still think that the potential sectors to be developed in those cities are related to agriculture and fisheries, while only a small percentage thinks that tourism can a potential driver for the economy, except for cities already known to be tourist destinations, such as Mataram and Manado. The false understanding about Indonesia as one of the biggest agrarian countries in the world, as well as the motivation of the current government to strengthen the maritime economy might have affected this view. This also indicates that many of the cities’ populations might not be well-informed about the business and economic potential in their cities and surrounding areas.

Most of our respondents perceive no significant change in economic welfare, employment opportunities and business opportunities in their cities within the last three years.

2.3.5 MSME Characteristics The survey of MSMEs found that the majority of small business in the 10 cities are predominantly in the retail and trade sector. Small businesses in the food and beverage sector can also be easily found in this region, followed by handicrafts from wood, bamboo and rattan. However, a large portion of respondents could not be classified easily into a common statistical classification.

That might be because of the issue of informality. Many of the business are not registered. On average, only 60.71 percent of MSMEs are registered with the government. Manado and Kupang are two cities that could become examples for the importance of registering MSMEs. Around 82 percent of small businesses in Manado have been registered, while Kupang follows with 78.89 percent. 19 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Figure 10 Main Reasons why MSMEs Register their Businesses Business certainty Increase sales value Others

Jayapura

Manokwari

Ambon

Kupang

Mataram

Gorontalo

Manado

Kendari

Palu

Makassar

10 cities

0 20 40 60 80 100

Source: CSIS Survey, 2018

The majority of MSME can be found in retail and trade sector, followed by the food and beverage sector. About 62% of MSME are micro enterprises that only employ 1-4 persons. The most frequently cited obstacle for MSME expansion is limited access to finance. 20

Almost 80 percent of MSMEs in the 10 cities say they register their of the MSMEs employ 20-99 persons (medium business/industry) or business because they need business certainty. Only 12.09 percent more than 100 persons (big business/industry), respectively. Their of MSMEs in the 10 cities registered their business to increase their small size prevents them from working efficiently and expanding sales value. The rest of the respondents state the various reasons their businesses. why they register their business with the government were because they mostly want to run their businesses without any interference These drawbacks might be also related to the motivation in starting from either government or non-government bodies. the business. The results from the survey show that the main reason for starting their business is a motivation to become an Meanwhile, for the MSMEs that have not registered their entrepreneur (52.24 percent). But a significant proportion of them businesses, they mostly think that it will be time-consuming to do it for “involuntary” reasons, such as difficulty in finding formal register because of complicated bureaucracy. On average, 34.79 jobs, or just filling in their free time. percent of MSMEs in the 10 cities admit that they have not registered their businesses because they still have a poor perception One of the most commonly cited obstacles for small businesses of government bureaucracy, primarily related to corruption, in expanding their activities is limited access to finance. Most of bribery and other activities that can be categorized as red-tape the MSMEs in the 10 cities (more than 80 percent) rely on personal bureaucracy. Moreover, 30.41 percent have different reasons that and family sources. The awareness of MSMEs in utilizing banking they did not specify during the interviews. Meanwhile, 10 percent and financial sector services for their businesses is still too low, are simply too lazy to register their businesses, or they think that fewer than 20 percent of them take a loan from commercial banks. it is too expensive to register and the other 14 percent did not Only MSMEs in Manado and Kendari seem to have a relatively high answer the reason. The issue of complicated and time-consuming understanding of the banking and financial sector in running their bureaucracy or time-consuming issue is also the main reason why businesses, with 36 percent and 25 percent, respectively, taking a MSMEs in Jayapura (46.34 percent), Gorontalo (44.44 percent), loan from a commercial bank for their businesses. Meanwhile, the Kendari (42.22 percent) and Mataram (39.58 percent) are reluctant proportion of MSMEs that use the banking sector as a source of to register their businesses. The national regulatory reforms that financing is relatively low, less than 20 percent, in other cities. have already been implemented should be implemented at a local level to remove this issue. The figure above shows that MSMEs are mostly driven by personal or family reasons. When business people or entrepreneurs start Another issue related to MSMEs in EI is their size. On average, our their business in the context of MSMEs, they mostly rely on advice survey reveals that more than 62.24 percent of the MSMEs employ or insight from their close family. Strong faith in family is the key only one to four persons (micro business/industry), and usually the reason why many young entrepreneurs or business people take the workers are their own families or relatives. Moreover, 15.51 percent risk of running a business. MSMEs’ lack of faith in the banking and of the MSMEs engage five-19 persons (small business/industry) as financial sector is the factor that leads them not to rely on money workers in their businesses. And only 2.14 percent and 1.02 percent from commercial banks.

Figure 11 Main Reasons for Starting a Business Difficult to get a formal job Fill the spare/free time Utilize the excess fund Motivation to become Continue the family business an entrepreneur Do not know

Jayapura

Manokwari

Ambon

Kupang

Mataram

Gorontalo

Manado

Kendari

Palu

Makassar

10 cities

0 20 40 60 80 100

Source: CSIS Survey, 2018 21 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Ch.03 InformationInformation andand DigitalDigital TechnologyTechnology inin EIEI

More than 40% of our respondents find issues with internet stability, speed, price and coverage in EI. Social networking and news consumption constitute the two most frequently performed online activities by our EI respondents, while commerce-related activities, such as shopping and trading, are among the least frequently performed activities. 22

Figure 12 Frequency of Devices Used in Accessing Internet

100 90 80 70 60 50 40 30 20 10 0

Mobile phone Tablet Laptop Computer

Source: CSIS Survey, 2018 Often Rarely Never

3.1. General Conditions

ccording to APJII data, also showed similar results in which 87.7 about 54.68 percent of percent of general respondents often the Indonesian population use mobile phones while accessing the use the internet. This is internet. an increase from only 20 Amillion users in 2007 to 143.26 million Another profile fact revealed by the people in 2017. Most of the internet users APJII Survey 2016 was that people are concentrated in (58.08 percent), spent most of their time on the internet followed by with 19 percent. chatting and social networking (89.35 Meanwhile, the whole of EI (Sulawesi, percent) and only a small portion used Bali-NTT and Maluku-Papua) only it for mobile banking (7.39 percent). accounted for 14.85 percent of internet This is similar to the findings of a survey users in Indonesia. conducted by CSIS in January 2018 when most respondents answered that The 2017 APJII Survey provides an chatting and social networking are their overview of the penetration of internet main activities while accessing the users in urban areas (72.41 percent) internet (62.7 percent of respondents compared to rural areas (48.25 answered “often”). In addition, another percent). Surveys conducted by CSIS of the respondents’ similarly frequent to explore the potential of digitalization activities when accessing the internet in 10 major cities in EI showed that 50.8 is reading the news (62.6 percent). percent of respondents are internet Other activities undertaken while users. The remaining 49 percent do not accessing the internet were listening use the internet. to music, watching videos and browsing for information. The latest data released by the Technology and Information Ministry The issues of internet penetration for 2016 is consistent with the results and access in EI are captured in of the APJII survey, which showed that our survey, explaining many of the some internet users in Indonesia (44.16 underlying factors ranging from a lack percent) used smartphones to access of infrastructure, less reliable internet the internet. Very few (4.49 percent) connections because of poor existing use computers/laptops to access the infrastructure and high prices to access internet. CSIS surveys in 10 EIn cities to the internet and so forth. 23 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Figure 13 Activities Conducted While Accessing Internet

80

70

60

50

40

30

20

10

0 Social Blog Online Music News Games Shopping Videos Website networking writing trading

Source: CSIS Survey, 2018 Often Rarely Never

3.2 The Use of Information and Digital Technology Figure 14 Respondent Perception of Internet Reliability, 3.2.1 Governance Pricing and Coverage In general, the 10 cities of EI have used digital technology for providing public services, albeit in still limited ways. One of the issues in the use of digital technology is a lack of awareness by the public that certain services can be accessed 60 online. Only 42.2 percent of the respondents were aware that some services are available online. Another 42 percent said they had not used digital 50 technology and the internet for that purpose, while the rest had no idea about it. It is fair to say that the problem is not about availability, but rather about the information known to the public. Among 40 the public services provided by local governments, most respondents were aware of the use of digital technology for civil registry matters: land 30 certification (66.4 percent), business permits (61.4 percent), building permits (58.3 percent) and policy publicity efforts (56.6 percent). 20 Another issue is the lack of local innovation in the use of digital technology by local governments. Most online systems and applications are built by the central government or adopted from other local 10 governments in Java, such as those for business permits and citizenship IDs (KTP). While that might be a good strategy for introducing the use of 0 digital technology, most of the local governments Internet Internet Price Coverage in EI have very limited ability to adjust the systems stability speed according to local needs and that might discourage people from using them. In general, public perception of technology usage Satisfied in government institutions is favorable. Of the Not Satisfied three variables (ease of access and usage, 24- Source: CSIS Survey, 2018 DK/ NA hour availability and the comprehensiveness 24

The main issue of technology usage for public services delivery is the lack of public awareness that certain public services can be accessed online. Only about 42% of respondents are aware of the online presence of such services. 25 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Three key challenges of public services digitalization include the lack of capacity and competence of local human resources, the lack of dedicated personnel in charge of updating the contents and the lack of sustainable financial resources. 26

of services), ease of access ranks the Figure 15 Digital Technology Utilization in Government Programs highest. Meanwhile, 24-hour availability and comprehensiveness still have less than 50 percent favorability. We found that even if the hardware 93,8 is available, it is still not comprehensive enough. Citizen 6,0 While in more developed cities – for example administration Makassar – online public services have been used 0,2 for certain administrative applications, residents still often need to go to government offices for 64,4 other parts of the applications. Land 33,2 certificate 2,4 The survey found that respondents are quite favorable to the use of online platforms for administrative 61,4 and public services when they are available. Of the Business 26,2 four variables in the survey, speed of service ranks permits the highest at 90 percent, followed by the saving of 2,4 administration costs at 80.3 percent, avoidance of unauthorized charges at 77.9 percent and saving 58,3 of transportation costs at 76.3 percent. However, Building 38,8 permits most respondents (60.6 percent) say there is no 2,9 online platform available for reporting problems and feedback to the government and another 20 percent 56,6 have no information on the location of this platform. Socialization of Government 41,5 programs 1,9 Only 20 percent of the survey respondents said Available there are online platforms to report problems and Not Available feedback. The majority of them said they believe the Source: CSIS Survey, 2018 DK/ NA mechanism is not yet optimal. Of the three tested aspects, the availability of an online mechanism scores below 65 percent. Only 59.7 percent said a 24/7 call center is available, while 62.2 percent said Figure 16 Public Perception of Digital Technology Usage in a government website is available and 59.4 percent Government Offices said social media is available. Overall, the availability of government websites is still low. Many of the 78,3 cities’ websites have not been updated for years and have become ineffective for communication. Again, 59,2 59,1 a lack of resources emerged as the major reason for outdated and dormant websites. However, even 40,8 40,9 the less demanding social media has not been used intensively to communicate with the public. Only a 21,7 half of those 20 percent of respondents know that social media is used to communicate with the public and to allow feedback and complaints.

Easy to access and use Available 24/7 Comprehensive The digitalization of public services in local government still faces challenges, such as the Source: CSIS Survey, 2018 Yes No lack of capacity and competency of local human resources. There are almost no dedicated personnel Poverty Indicators (2017) in charge of updating the contents of websites or Table 7 social media pages. Most officials are not that familiar with the use of online platforms and lack Availability Benefit the creative capacity to update the information. Category Another issue is a lack of sustainable financial Available Not Available Yes No DK/NA resources. While the governments might spare Call Centre 24/7 59.6 40.4 88.1 11.9 funds for the development of online platforms, including websites or social media pages, they Gov’t Website 62.2 37.8 83.3 15.5 1.2 are often unable to provide funding for further Social Media 59.4 40.6 83.8 16.3 development. It is common to see city websites not being updated for years. Source: CSIS Survey, 2018 27 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

3.2.2 Education After observing the current situation related to public service provision in education, health and security, it is also significant to notice how digital technology has been used in those aspects and how people perceived the benefits. Only a few respondents claim According to the survey, the majority of the respondents in the 10 cities value the positive benefits of technology in education and to ever use online health issues, because it supports the finding of information more registrations for effectively (74.5 percent) and also to facilitate communication between teacher and students, or between health workers and the available health public (13.1 percent). services (14%), or to The survey also reveals that search engine is widely popular among find health-related the respondents for supporting the learning process (65.3%). Meanwhile, social media applications, such as Facebook, Twitter information from and Instagram, were also popular among the respondents. Almost social media (34%). half (45.2 percent) of the respondents perceive that social media has been used to support education process, while 78.5 percent Meanwhile, local feel its benefits. Social media is most widely used in Gorontalo (55.5 percent), followed by Manado (54.3 percent). The lowest usage health practitioners of social media was found in Mataram (34 percent), followed by acknowledge their Manokwari (38.4 percent). Yet, most of the internet uses remain to be individually-motivated, with only limited government programs struggles, due to lack are available. of time and creative

Similar situation can also be observed on health-related issues. skills, in maintaining Cities governments have not used online information intensively online presence and to support their public service duties. Only 14.3 percent of the respondents use online registration for available health services, developing contents 15.3 percent for health information from local health centers and even fewer for obtaining doctor practice schedules. This is mostly for social media or due to limited availability of such online services and information websites. in the cities we surveyed. Most information on health issues was acquired over the phone or through text messages. During the FGDs, many local health officials acknowledged that they have not used online platform, including social media, to disseminate information intensively, although most of them said they know it is very effective for informing the public about local government health programs.

Digital technology has been From the FGDs and in-depth interviews, the beneficial for supporting participants argued that internet applications have been used frequently to spread fake news and to education process in EI. start conflicts. However, the significant role of However, our respondents technology for preventing and mitigating conflict has been widely acknowledged by the respondents report that the use of digital in the 10 cities. The majority (38.4 percent) agree on the use of technology to report or monitor the technology for education in potential of conflict as an early-warning system. EI is mostly individual-driven This was followed by the 33.2 percent who favour the use of technology to counter hoaxes. According to and primarily limited only our field research in Ambon, which has experienced to administrative aspects of brutal religious conflicts in the past, Facebook has been used to promote “positive news” to counter education. disinformation or hoaxes that could potentially lead to new conflict. Some local governments have also introduced online-based initiatives to prevent conflicts and improve public security. 28

Figure 17 Usage of Online Health Services Already online Not online Don’t know

54,0 53,7 52,2

46,5

38,8 38,4 38,2

33,6

14,3 15,3

7,2 7,9

Services and health Online doctor practice Online registering Online consultation information in health schedule centres

Source: CSIS Survey, 2018

Digital technology has been utilized to monitor and counter false information, and serve as an early- warning system against potential conflicts. A prime example is found in Ambon, where some people have taken to Facebook to promote ‘positive news’. 29 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Figure 18 What are the Challenges in Internet Utilization?

Others

Takes too much time and effort

Costly

Feature knowledge

Platform availability

Internet speed

Internet network stability

Internet access

0 20 40 60 80 100

Source: CSIS Survey, 2018

3.2.3 Economic and SMEs The SME survey stressed the role of technology, in almost all the cities. According to in-depth especially the internet and social media, in business. It interviews in Manokwari and Jayapura, internet not only captured the SMEs’ internet and social media infrastructure is still the major obstacle in Papua. In utilization in the region, but also their perception 2016, internet services were static for about three of government services: i.e. e-government. Some weeks because the fiberoptic infrastructure was potential benefits and challenges were discussed damaged by an earthquake. Because there is only to assess the SMEs’ digital readiness and, finally, one provider available in Papua, its reliability is to formulate relevant policy recommendations. This crucial so that internet services can be sustained. If section covers the findings from both the survey an SME relies heavily on internet/online marketing, results and some narratives from in-depth interviews then there is a high chance that this situation would and focus group discussions. be harmful to its business.

To explore the use of technology by SMEs in the 10 Despite all the obstacles, some local initiatives are cities, we focused on the internet as a business quite promising. From the interviews, we found an and marketing platform, such as social media, internet community in Manado that tries to promote chatting applications, e-commerce, etc. In general, local tourism by producing videos and reviews of the respondents of the SME survey divide into tourist attractions using social media. This helps three major sectors: trade (24 percent), food and the tourism sector, especially helping SMEs obtain beverages (7 percent) and automotives/components greater market access through social media (5 percent). The SMEs’ utilization of the internet in promotion. In Makassar, SMEs benefit from a local the 10 cities is markedly low. Only 30 percent of the e-commerce platform called makassarberdagang. SMEs use the internet in their businesses. Palu is com. It is not only limited to commerce, but also the only city that has an internet utilization rate of publishes job opportunities. In addition, it offers slightly above 40 percent, while Manokwari has the capacity-building activities for sellers and buyers, lowest with less than 10 percent. such as tips and success stories about promoting their products in the online market. Figure 18 shows that internet quality – e.g. accessibility and reliability – are the most important Of those who are not using the internet, most of the challenges for the businesses. This trend is found respondents argued that it takes too much time (53 30

percent) and they do not know how to operate it (37 percent). Therefore, it is important the SMEs develop their understanding of and skills related to the internet to enjoy the potential benefits of using it. Second, it is also possible that their customers still lack internet literacy, so they prefer to do business The use of digital the conventional way, like through direct face-to-face commercial activities. platforms by MSME Therefore, capacity building – for example, training and workshops to increase the digital literacy of both seller and buyer – is crucial. in EI has been limited mostly to As a marketing tool, social media is preferred by local SMEs compared with other online platforms, such e-commerce. Almost 80 percent of the SMEs marketing. Apart choose social media for marketing their businesses. One of the possible reasons that we discovered during interviews in Jayapura is that social media from the poor internet provides an easier way to handle complaints because they can be responded quality, the lack of to personally by email, phone calls, or messaging. In e-commerce, reviews are visible to other customers and they can affect the rating of the SMEs and, internet literacy of finally, sales and profits. both customers and

According to the survey, the utilization of social media for business is relatively business owners is also low. Only 32 percent of the SMEs are using it as a business or marketing tool. The a major impediment. highest utilization is found in Gorontalo and Kendari, where the rate is about 73 percent. The lowest is Manokwari where less than 10 percent of the respondents Therefore, improving use social media for their businesses. One of the possible reasons, according to the interviews, is that most SMEs focus on local markets. Some of them prefer the digital literacy of to use regional forums/platforms in social media so that their products can be both parties is crucial. sold faster with lower logistic costs. An example is the regional Buy and Sell Group in Facebook.

Figure 19 Why are Respondents not using the Internet?

100

80

60

40

20

0

Makassar Palu Kendari Manado Gorontalo Mataram Kupang Ambon Manokwari Jayapura

No smartphone Takes to much time

Source: CSIS Survey, 2018 No internet access Does not know how to operate 31 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Social media are generally preferred by MSME as marketing tool, compared to other online platforms like e-commerce, as social media facilitates an easier and safer way of handling complaints. 32

Figure 20 Which Social Media do You Use?

100

80

60

40

20

0 Facebook WhatsApp Instagram Line Google+ Other

Source: CSIS Survey, 2018

Facebook, WhatsApp and Instagram are the most popular platforms for SMEs to use as marketing tools. An interview with the operators of a wedding salon in Palu revealed that they mostly use social media, such as Facebook The lack of capacity and Instagram, to promote their products and services. On these platforms and literacy they can showcase their products and communicate with their potential customers. In the case of WhatsApp, the platform has been very useful for are important one retailer in Manokwari, where the operators usually use it to communicate obstacles for both with their suppliers, which are mainly located in and Manokwari. For example, the staff can ask the suppliers by WhatsApp about the products in online business stock and the suppliers can send them pictures of what they have. All in all, these platforms have increased their efficiency. activities and the stumbling block Figure 21 shows that most of the respondents who do not use social media are not sure about its effectiveness for promoting their products (40 percent). for development of Moreover, they also do not how to operate the social media (33 percent). Again, technology in EI. the issue of capacity and literacy are the Achilles’ heels of the development of technology in EI. One possibility is that there are not many examples of local SMEs that have been using social media extensively.

Figure 21 The Reasons Why SMEs do not use Social Media

40.36% 38.19% 32.69% 28.97% 22.77% Not effective Don’t know Don’t have Limited Limited how to use social media internet smartphone access access social media

Source: CSIS Survey, 2018 33 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

Figure 22 The Use of E-Commerce Platforms and its Challenges

Return management

Communication with buyers

Tracking management

Updating the page

Online payment/ transaction

Designing the page

0 5 10 15 20 25 30 35 40

Source: CSIS Survey, 2018

There are two examples of capacity-building and management of content and communication programs that we found in the interviews. The first is with buyers. the Kampung Digital that is supported by PT Telkom in Kendari. This initiative facilitates communities Finally, Figure 23 explains the SMEs’ perceptions of by providing digital equipment and Wi-Fi to support the use of technology in government services, such as their online businesses. The program helps SMEs e-government. Based on the survey, 25 percent and 23 and communities that rely on internet access percent of the respondents agree that tax and business for their businesses. Another example is a local permits are already covered by e-government. The community group called Jago Jualan in Gorontalo. responsible agency for these services is the Pelayanan The members of this community are largely youth Terpadu Satu Pintu (PTSP) office. According to our who already have businesses up and running and interviews, the number of permits that can be done spreading widely to other regions in Indonesia. online varies across the region depending on the city. They used whatever online platforms they can to In addition, the government also faces a big challenge promote their own products. The community holds publicizing these services. regular meetings, training sessions and workshops to update the members’ knowledge of online Consistent with our findings, the ease of following marketing strategies in social media. procedures has a positive correlation with the availability of e-government. Business permits are Other than social media, only 10 percent of rated as the easiest of all services at 38 percent. the respondents use e-commerce platforms. Slightly lower rated is taxation, which is 37.6 percent According to an interview in Manokwari, the on average. Export and import procedures are the subject rarely uses e-commerce to find products most difficult. Note that the services provided by the because the logistic costs are very high. In fact, PTSP office are not yet fully online, so people still the cost of delivery can be as high as the cost need to go to other government agencies. However, of the product itself, if not more expensive. The the efforts to digitalize government services on the main challenges in e-commerce are the design city level should be appreciated. 34

Despite the generally scarce use of internet among MSME, EI is also home of several promising local digital initiatives.

Figure 23 Availability of E-Government

50

45

40

35

30

25

20

15

10

5

0 Makassar Palu Kendari Manado Gorontalo Mataram Kupang Ambon Manokwari Jayapura

Business permits Labor affairs Police affairs

Source: CSIS Survey, 2018 Tax Export/import documents 35 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia 36

Ch.04 SummarySummary andand ConsiderationsConsiderations forfor AssistanceAssistance ProgramsPrograms

Some Considerations for Assistance Programs Given the pre-existing situation of the utilization of online services in the various aspects of the social and economic life of EI, we observed several possible considerations for designing assistance programs in the region. Here we discuss each of them briefly before coming up with possible programs that potentially improve benefits from digitalizing the region.

• While, in general, the region remains less developed in terms of digital utilization, the situation varies greatly in cities that have advanced use of technology to support public service delivery and to support business and economic activities. Therefore, it is important to look at conditions in each city when designing possible assistance programs. Some less advanced cities might be more suited for introduction programs about the potential uses of online platforms, including social media, while some more advanced ones need more specific assistance to build their capacity and to promote more effective use of the internet. Our city analysis provides the pre- existing conditions in each city and the possible assistance programs to address relevant issues6.

• It is also important to acknowledge that the city governments have started their own programs to use digital technology and online platforms, although there are various issues as discussed above. The proposed programs can be linked to their digital-related programs. However, there are also many potential areas where relatively simple use of online platforms might help significantly, but the government has yet to come up with an effective program to harness the benefits of digital technology. The proposed assistance programs would provide significant contributions for supporting government programs in those areas.

6 In addition to this general report, CSIS also produces city analysis reports for each city we surveyed. City level analysis is available upon request for those interested. 37 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

• In addition to governments, various local communities have also utilized online platforms to support their activities. These communities might be based on geographical areas, such as local communities for certain districts in the city, or be based on common interests, including professions. Digital technology, for example, has allowed local health professionals to communicate and share information with each other and to form online communities. Having engagement with those online communities and providing technical assistance might increase the contributions of these proposed assistance programs.

• Since three years ago, the Indonesian government has been disbursing Village Funds, a relatively significant amount of money distributed to villages across Indonesia, including to kelurahan (subdistricts) in urban areas. Many of those villages and subdistricts use the money to finance village enterprises: Badan Usaha Milik Desa (Bumdes). Those Bumdes can become candidate recipients of the assistance programs, in particular for assistance in economic activities. 38

Possible Assistance Programs There are three areas of assistance that can be designed to support the digitalization of EI: (i) Capacity-building programs, (ii) Assistance for the development of online platforms, and (iii) Assistance for facility development.

Those three areas would complement each other and provide support for the optimal use of digital technology in the region. We discuss each of the assistance programs below.

(i) Capacity Building

Capacity building is the most important aspect of services. They are intended to be delivered to larger this proposed assistance program. It is intended audiences in order to raise awareness of related to provide participants with better knowledge issues. These workshops and seminars might be of the use of digital technology and online complemented by training sessions that provide platforms, such as social media. It can be done hands-on knowledge of the use of digital technology via two types of activities, namely workshops/ for certain purposes. The training can also cover seminars and training. various other related aspects, like video making, photography for promotions, or product cataloguing Workshops or seminars are designed to provide for online marketing. The training activities should basic general knowledge of the potential benefits be aimed at potential and selected users in order to of digital technology and to present the possible create concrete benefits. Below we discuss some uses of such technology for supporting various potential capacity-building programs for various aspects of society and for the delivery of public elements of society. 39 Exploring the Potential of Digitalization for Inclusive Socio-Economic Development in Eastern Indonesia

For Government Officials While most government officials are aware of the and communication among those professionals, (ii) benefits of the use of digital technology, many are communication with patients or with students and not aware of its potential use to support their work (iii) the dissemination of information to the general as public servants. A workshop that provides real public. examples of the use of even a simple social media page might be good for increasing knowledge about Training for those educators and health workers what online platforms can deliver to support public might provide them with the skills needed to services. One potential application is to use social advance. For example, training or workshops for media to communicate various issues or events educators might be intended for developing teaching and programs that a city government has initiated. materials. The program might even go further to give Another use is to provide a platform for members of technical assistance to develop such materials that the public to express their opinions and aspirations can be used by many schools and teachers in the to the local government. Each technical office – for region. example, education or public health – might develop its own page and maintain good communications To Businesses and MSMEs with the public. As revealed by our field research, the utilization of online platforms for business and economic A workshop can be complemented by technical and activities is still limited, in particular in less hands-on training in developing and maintaining developed cities. Therefore, workshops and simple platforms to support government programs. seminars conducted to introduce the application Materials for the training can include information of social media and online platforms for marketing, about the technical issues of maintaining the promotion and business communication are still platform, but also about creative processes, important in several cities. such as photo editing, creative writing and other related skills. The training should ensure that the In more advanced areas, more specific training officials become more confident and enthusiastic in might be conducted to fill the gaps of needed skills. developing such platforms. In several tourist destinations, for example, training for photo and video editing is needed in order for For Local Public Service Workers recipients to produce attractive and informative Similar workshops and training sessions might also tourism promotion. In several cities with a strong be aimed at public service workers, such as health business presence, more specific training, such as workers or teachers and educators. The workshop for product cataloguing or delivery packaging, might should introduce various potential uses of social be needed to support online-based marketing, as media platforms for (i) the exchange of information well as for photo and video editing. 40

(ii) Technical Assistance for Platform Development

In several cases, assistance programs can take Another example of technical assistance is support the form of help to develop the online platforms for the development of online teaching materials themselves, based on available ones, but designed that can be used by online educational programs to cater to local needs. One example is assistance for in the region. This can be combined with the the development social media pages for technical development of interactive online platforms to offices in city government. It would complement the allow better communication among teachers and training of government officials described above. between teachers and students. These activities would provide hands-on experience to the officials involved, which would be useful for the future maintenance of the platforms.

(iii) Assistance for Facility Development

Two striking features learned through our field areas, including in tourist destinations. Another research is the lack of open public facilities for example of useful assistance might be support for internet access and the high demand for such digital community development by providing spaces facilities, even in more developed cities. The for young people to engage with and learn about assistance programs might also be complemented digital technology. by providing such facilities, such as public Wi-Fi