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Indonesia’s economy needs 7% growth for Vision of 2045: official

  • November 20, 2019

Jakarta (ANTARA) – Indonesia’s economy needs seven percent annual growth to achieve the gross domestic product (GDP) of US$7 trillion by 2045, Deputy for International Economic Cooperation at the Coordinating Ministry for Economic Affairs Rizal Affandi Lukman stated.
This is the target of Indonesian Vision 2045, set by President Joko Widodo, to reach the GDP of US$7 trillion that allows Indonesia to become the fifth largest country in the world.

“If the growth remains at five percent for the next 25 years, (the GDP) will only be around US$5 trillion. So, to reach US$7 trillion, Indonesia must grow an average of seven percent per year,” Rizal said at the Indonesia Economic Forum in Jakarta Wednesday.

The economy did not have to grow directly from five to seven percent considering severe global challenges, which indirectly also affect various sectors supporting the Indonesian economy, Rizal further explained.

Therefore, the government needed to make various structural changes by making the investment and export sectors the main support in achieving the seven percent target each year.

Related news: Indonesian govt outlines three scenarios of economic growth projection

Even though the contribution of domestic consumption has been quite strong it can still produce only a stagnant growth of around five percent, Rizal said. Therefore, there must be an improvement in various areas that challenge investment and exports, he added.

“Structuring about 70 laws into an omnibus law and improving trade agreements is important because it is a source for achieving higher growth,” he added

Not just that, the government could also take advantage of the trade war between the US and China that has caused many industries operating in China to consider relocating their businesses.

“Looking at the external situation, inevitably we have to fight with all our strength to take advantage. This opportunity provides us with a quick win on how to increase cooperation with other countries,” Rizal emphasized.

Indonesia must improve its technology and infrastructure so it can compete in the global market to grab the opportunity of receiving investors and companies that will relocate their businesses from China, he added.

“We must have a low logistics cost with a competitive industry. With the problem of laborers which has been considered quite burdensome, we need to strike a balance between welfare and competitiveness of the industry,” he said in conclusion. 

Related news: BI forecasts economic growth of 5.5 percent in 2020

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