Indonesian IT minister says to rethink strict data localization laws

A key regulation on local data storage is currently under review but it will be a while before tech companies and startups have full clarity on this.

Photo by Markus Spiske on Unsplash.

Indonesia had just begun to get more serious about enforcing regulations that require tech companies to store data in local data centres rather than using cloud services whose physical centres are located out of the country.

But now those strict rules might be up for debate again, according to the country’s communications and information technology minister Rudiantara.

As CNN Indonesia reported, Rudiantara deemed the requirement “inefficient” and not conducive to digital economy growth, because it doesn’t account for the many advantages of cloud computing technology. But he also upheld the view that certain sensitive data would still need to be stored locally.

“What’s related to security and personal data will have to use data centres in Indonesia. What’s beyond that can make use of cloud computing,” he said yesterday as quoted by CNN.

Several government stakeholders are currently reviewing regulation No. 82 from 2012 about electronic systems and transactions. The draft is supposed to be finalized by the end of the month, but will then still need to be approved by the ministry of law and human rights.

It might be a while before startups and tech companies have full clarity on this matter.

Takeaways

– Heated debates and frequent revisions of regulations are not uncommon in Indonesia. As the country adjusts to rapid digital transformation, there’s friction between calls for tighter controls and nationalistic agendas on one side and the desire for innovation and economic growth on the other.

– Alibaba’s cloud computing business already has data centers in Indonesia and Amazon just announced it might spend US$1 billion to build facilities in the country. A change in regulation might not necessarily affect these tech giants’ investment plans, because the need for domestic data storage and computing will continue to grow regardless.

Editor: Ben Jiang