You can contact the author (Teguh Hidayat) by email, The author live in Jakarta, Indonesia.

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New Engine of Economic Growth: Internet!

When studying the data of economic growth for the third quarter of 2015, I was confused by the fact that the level of national consumption still grew 4.96%, or above the overall economic growth of 4.73%, whereas the prices of goods clearly soaring, and it should lower the purchasing power of people. But as far as I could observe, almost everybody is still happy, and even the workers still dare to protest to demand higher wages. The question is, how can it be?

And just a few days ago I realized something that might be the answer. So I was run out of internet quota while browsing the internet on a laptop, but it was already late at night so I cannot leave the house to go to store to buy phone credit. So I was browsing the internet again use my cell phone to find people who selling voucher of internet quotas, and I found a lot of them. I eventually contact a seller, he mentioned his bank account number, I use e-banking to transfer the money, and the voucher is sent via Whatsapp. The entire transaction process occurs in less than 10 minutes, and I only pay Rp125,000 from the normal price of Rp150,000, if I bought the voucher in regular store.

Well, from the event, I suddenly aware of the role of of internet which helping the transactions of buying and selling to become much easier than ever before, and as a result the amount of the transaction itself increased significantly, and in turn stimulated the economy. The existence of internet allows at least three things which previously almost impossible to occur, namely:

1. To accelerate the transaction
2. Buying and selling becomes more efficient
3. You can buy and sell anything in anytime, and anywhere!

In the example where I bought the voucher of internet quota, imagine if there was no internet connection (or it was, but I had to go to the internet cafe and can not browse it through the mobile phone). I’d have to wait until tomorrow morning to go to store to buy the voucher, and consequently there is a delay of several hours before the sale and purchase transactions occurred. I’d buy the voucher at the store at a normal price, or even more expensive, because the seller had to pay rental for the kiosk, etc., where such costs are charged to the buyer (not efficient). And third, I should take time to go to the location of the store, before go back home.

However, because of the internet, then here it is: The transaction occurs immediately, in less than 10 minutes, I pay less but the seller still generates profit, and I did not need need to go anywhere! But still sat in front of my desk.

And, can you imagine how many buying and selling transactions of a wide variety of goods and services that occurred that night accross Indonesia, which would not be possible if not for the internet???

In short, the economic activities in Indonesia, or even throughout the world, definitely would not be as easy as today if not for the internet, and of course it boosted the economic growth itself. There are many people who suddenly become a master in marketing because of the internet. And the good news, currently the e-commerce business in Indonesia is still in the early stages, where the number of Internet users in Indonesia are still about 80 million out of 270 million population, but the developments were fast. Ten years ago, almost nobody thinks about ‘selling on the internet’, but today a variety of e-commerce websites such as FJB Kaskus, OLX, Lazada, Tokopedia, Traveloka, etc., began to gain prominence. And if you can take the time to write about stock investing or any field that you master, then you can make a blog like that you are reading now. So the opportunity is open for everyone.

Logo, the most prominent e-commerce website in Indonesia

Okay Sir, so what’s your point?

From several discussions with investors and analysts, I found that they have their respective views about the economic prospects, and also the outlook of stock market in 2016, where some of them are optimistic, but some others are pessimistic. However, either because they forgot or did not aware, none of them mentioned the role of the Internet on the economy, although that role was very, very real. But maybe that's because an analyst usually only focus on stocks on the Stock Exchange, and in the Indonesia Stock Exchange there has been no internet companies such as,, or, which have been listed in the US.

But my point is, because the economic transactions become much easier because of internet, the national economy will be boosted to grow rapidly in the future, and one day the role of the internet will be able to close the economic gap that occurred in Indonesia since 2012 ago due to falling prices of commodity of coal and CPO. And if the macro economy continues to improve in general, then the performance of the listed companies on the Stock Exchange will also improved and, of course, the Jakarta Composite Index (JCI) will go up.

So although we certainly can not precisely predict about the development of economy/movement of JCI in the future, including about when the price of coal and CPO will rise back, but one thing for sure, we now have the new ‘engine’ to boost the economy which named internet. I think, within 2 – 3 years from now, we will begin to see one or two local e-commerce companies which hold an IPO and.. let's hope that the momentum will not end like the dot com bubble in the United States in 1999.

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