Why the U.S. Overlooks Indonesia’s QRIS, GPN, and TKDN: A Missed Opportunity Amid Inshoring and Tariff Shifts

Abdullah A Afifi7 hours ago

0 3 minutes read

Why the U.S. Overlooks Indonesia’s QRIS, GPN, and TKDN: A Missed Opportunity Amid Inshoring and Tariff Shifts

As the global economy undergoes significant transformations, Indonesia has emerged as a proactive player, implementing policies like QRIS (Quick Response Code Indonesian Standard), GPN (Gerbang Pembayaran Nasional), and TKDN (Tingkat Komponen Dalam Negeri) to bolster its digital infrastructure and domestic industries. These initiatives aim to enhance financial inclusion, secure payment systems, and promote local manufacturing. However, the United States appears to be overlooking these developments, potentially missing out on strategic economic opportunities in Southeast Asia’s largest economy.

Indonesia’s Strategic Economic Initiatives

Indonesia’s government has been steadfast in its commitment to strengthening its domestic economy. The QRIS system, for instance, has revolutionized digital payments by standardizing QR codes across various platforms, facilitating seamless transactions for millions of users. Bank Indonesia reported that as of mid-2023, QRIS had been adopted by over 26.7 million merchants, with 91.4% being micro, small, and medium enterprises (MSMES).

Similarly, the GPN initiative aims to create a unified national payment gateway, reducing reliance on foreign payment networks and enhancing the security and efficiency of domestic transactions.

The TKDN policy mandates a certain percentage of local content in products and services, encouraging foreign companies to invest in local manufacturing. This policy has seen significant success, with companies like Pertamina, for example, achieving a 60% TKDN realisation in 2021, amounting to IDR 9.73 trillion.

U.S. Hesitation and Missed Opportunities

Despite these advancements, the U.S. has shown reluctance to engage with Indonesia’s economic policies. The American Chamber of Commerce in Indonesia and the U.S. Chamber of Commerce have expressed concerns over the TKDN regulations, viewing them as obstacles to investment. This perspective overlooks the potential benefits of integrating into Indonesia’s growing economy and the opportunities for collaboration in the technology and manufacturing sectors.

Moreover, the U.S.’s focus on reshoring and insourcing manufacturing, especially under the Trump administration’s tariff policies, has led to a more inward-looking economic approach. This shift may cause American companies to miss out on strategic partnerships and market access in countries like Indonesia, which are actively seeking to attract foreign investment and technology transfer.

Global Companies Embracing Indonesia’s Policies

Contrastingly, other global players have recognized the potential in Indonesia’s policies. Apple Inc., for example, committed to a US$1 billion investment to establish a manufacturing plant in Indonesia after facing a ban on the iPhone 16 due to non-compliance with TKDN requirements. This move not only aligns with Indonesia’s local content policies but also secures Apple’s position in a rapidly growing market.

Such examples highlight the opportunities available for companies willing to adapt to Indonesia’s economic landscape. By investing in local manufacturing and complying with domestic policies, foreign companies can gain significant advantages in market access and consumer trust.

The Need for a Strategic U.S. Approach

For the U.S. to maintain its economic influence in Southeast Asia, a strategic reassessment is necessary. Engaging with Indonesia’s initiatives like QRIS, GPN, and TKDN can open avenues for collaboration in digital infrastructure, fintech, and manufacturing. By aligning with Indonesia’s economic policies, the U.S. can foster stronger bilateral relations and tap into a burgeoning market.

Furthermore, supporting American companies in navigating Indonesia’s regulatory environment can enhance competitiveness and innovation. This approach requires a shift from viewing policies like TKDN as barriers to recognizing them as frameworks for mutual growth and partnership.

Indonesia’s proactive economic policies present significant opportunities for international collaboration and investment. While the U.S. has been cautious, a more engaged and adaptive approach could yield substantial benefits. Recognizing and integrating with initiatives like QRIS, GPN, and TKDN can position the U.S. as a key partner in Indonesia’s economic development, fostering mutual prosperity in an increasingly interconnected global economy.

References: