Indonesia’s progress in 2045 will be determined by several economic indicators. The next 10 years will be crucial for successfully realizing the dream of an advanced Indonesia.
By
M Zaid Wahyudi/Rini Kustiasih/Karina Isna Irawan
·3 minutes read
JAKARTA, KOMPAS – The next 10 years will be crucial for successfully realizing the dream of an advanced Indonesia by 2045. The development agenda must be focused on efforts to address economic slowdown and geopolitical risks.
This emerged during a discussion panel themed “Toward an Advanced Indonesia 2045” held by Kompas in Jakarta on Wednesday (15/1/2020). Speaking at the event were Atma Jaya Catholic University rector A Prasetyantoko, Brawijaya University professor of economy Ahmad Erani Yustika, CSIS executive director Philips J Vermonte, Indonesian Academy of Sciences (AIPI) chair Satryo Soemantri Brodjonegoro and University of Indonesia’s Demography Institute chair Turro S Wongkaren.
Indonesia’s progress in 2045 will be determined by several economic indicators. Quoting a study by the National Development Planning Agency (Bappenas), Indonesia’s gross domestic product (GDP) per capita in 2045 is expected to reach US$23,199.
Prasetyantoko said the development agenda until 2030 would determine the achievement of an advanced Indonesia by 2045. Within 10 years, Indonesia must be able to strengthen its footing in economics, politics, social affairs and culture. “The next 10 years will be a gamble for Indonesia in terms of two important aspects, namely population and human resource quality,” he said.
Economic growth slowdown and geopolitical risks will affect the global situation.
Demography is said to determine Indonesia’s success of becoming an advanced nation. Therefore, the government’s huge investment in improving the quality of human resources is correct.
Meanwhile, in the medium to long term, Indonesia is facing the challenges of economic slowdown and geopolitical risks. “Economic growth slowdown and geopolitical risks will affect the global situation,” Prasetyantoko said.
He emphasized that Indonesia would be able to escape an economic slowdown by carrying out structural transformation through improving productivity and competitiveness, adopting new technologies and ensuring inclusive economic growth.
Ahmad Erani said there were at least four global and domestic issues that Indonesia should be wary of, namely issues of demography, natural resource competition, inequalities and climate change. The national development plan should be arranged to address these challenges.
Innovation-based
Satryo Soemantri said that, in order to escape the middle-income trap, improving innovation-based productivity would be key. “Based on Europe’s experience, development of innovative and highly value-added industries will be able to increase gross domestic product up to tenfold in 25 years,” he said.
Innovation-based economic development will only be achievable with quality human resources. A 2018 World Bank data on Human Capital Index (HCI) showed that the quality of Indonesia’s human resources was ranked 87 out of 157 countries. This shows that health and education development in Indonesia has yet to have any significant impact on improving the people’s productivity.
Turro S Wongkaren said that improving the education system would be important considering a 2015 survey by the Demography Institute that 48 percent of university graduates have jobs lower than their qualifications, 22 percent have jobs not in line with their education and 40 percent have jobs that accept graduates of all fields of education.
However, education improvement that addresses technical competency will not be enough. “Ethics and soft skills, such as cooperating with others, is important to teach,” Turro said.
Amid all pressures on democracy, Philips J Vermonte said that Indonesia should protect its democracy as best as possible as democracy entailed freedom, which is necessary to encourage creativity that leads to innovation.
“For the economy to grow, continuous innovation is required. For innovation to be present, freedom is required. In the end, democracy guarantees freedom,” Philips said.