Optimizing the Source of Growth

Indonesia still has sources of growth in the country that can compensate for the slowdown in global trade growth.

KOMPAS/PRIYOMBODO

Jobseekers look for information through leaflets distributed at the Indonesia Career Expo Jakarta at Balai Kartini, Jakarta, Tuesday (15/10/2019).

The decline in the global economy as a result of a trade war between of the United States and China, the world\'s two largest economies, has cast a shadow over many countries. Due to the slowdown in global trade, Indonesia’s economic growth estimate has been revised from 5.2 percent to 5 percent this year and from 5.2 percent to 5.1 percent next year.

Indonesia\'s economic growth is still quite high compared to many other countries, but we need even higher economic growth to solve many problems at home. The main thing is to open employment opportunities for a workforce that continues to grow every year and to reduce the social gap.

Indonesia’s economic growth estimate has been revised from 5.2 percent to 5 percent this year and from 5.2 percent to 5.1 percent next year.

We need high economic growth so that the demographic bonus we are currently enjoying can provide maximum results and enable Indonesia to become a rich country.

High economic growth, which is inclusive and environmentally friendly, is a necessity because we also have to reduce social inequality to ensure long-term sustainable growth. Sources of growth in general are exports, household and government spending, as well as investment.

KOMPAS/PRIYOMBODO

Irons are assembled at PT Selaras Citra Nusantara Perkasa in Cileungsi, Bogor regency, West Java, Thursday (10/10/2019). In the midst of the United States-China trade war, Selaras Citra Nusantara Perkasa seized the opportunity to export its first batch of electric air purifiers to the US.

With the demographic bonus, Indonesia has a large working-age population, while household and government expenditures are currently limited. Direct investment remains sluggish due to regulatory uncertainty, bureaucracy and corruption. What we can do is generate growth by raising government spending to reduce social inequality across Indonesia.

Government spending should prioritize domestic products, while infrastructure development should be focused on projects that would have a direct impact on the people’s economy, such as markets and village roads, which will link production centers with factories or processing plants and markets.

Sources of domestic growth that have not been optimally utilized are located in the villages, namely agriculture and fisheries. Another source is the creative economy, which involves many micro, small and medium-sized enterprises (MSME).

KOMPAS/WISNU WIDIANTORO

A parade of jukung (wooden boats) goes through the Martapura River to take part in the opening ceremony for the 2019 Floating Market Cultural Tourism Festival on 23 Aug. 2019 in Banjarmasin, South Kalimantan.

We have mapped out 12 economic sectors that can be developed by MSMEs, such as culinary, handicraft, fashion, performing arts, music and dance, which are closely linked to tourism. These sectors create sustainable growth and are more resilient and also involve the wider community.

Efforts in creating greater added value, millions of new jobs and the equal distribution of the economy in villages and outside Java can be realized faster if they involve the digital technology through the Palapa Ring broadband that can help farmers and fishermen, fishers and MSMEs.

Read more : Paying of the History Debt

The other important factors are coordination, sharpening the focus of the program and continuing to find new markets with new commodities, in addition to the improvements of the business climate, such as through legal certainty, business-friendly tax systems and a simple structure of bureaucracy, simple licensing and the elimination of corruption.