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Modern Indonesia : A secure place for Investment and Business I
Dr.Syed Mehboob
Political and Economic Analyst
http//: www.thenewslark.com
email: [email protected]
Indonesia under the dynamic, sincere and far sighted leadership of president Prabowo Subinato Djojohadikusumo and his able team is moving continuously towards the path of development, progress and prosperity. Indonesia leadership wants to make Indonesia a secure ans safe place for foreign investment, business and tourism. Its leadership has made a through, well thought and farsighted plan to convert Indonesia into a top ten global economy, high income nation, and a major global power by its centenary, utilizing a demographic dividend, developing its human resource as its powerful asset, industrial digitization, and sustainable, inclusive growth, key pillars focus on human capital, economic transformation, technological innovation and robust infrastructure.
Indonesia has made a rigorous plan to convert itself from raw resource extraction to industrialization ( down-streaming) and high value manufacturing to escape the middle income trap by 2038. Accelerating industrial digitalization to boost productivity and foster a dynamic creative economy. It has a rigorous plan to empower the young population through improved education and health services to maximize the demographic dividend. Indonesia targets sustainable economic growth above 5% in 2025 and beyond. The new administration emphasizes improving infrastructure, attracting foreign direct investment (FDI) , and regulatory reform ( e.g labour laws) . It plans to strengthen Indonesian influence in global supply chains, trade integration, and as a key player in Association of South East Asian Nations ( ASEAN) and G20.
President Prabowo Subianto has an ambitious economic goal for Indonesia, the largest economy in Southeast Asia, to hit 8% annual economic growth by 2029. To achieve this, the Indonesian Government is prioritization increased investment, expanded exports, and a continuation of the “down-streaming” policy implemented during the previous Jokowi Administration. The Government is confident it can reach its goals.
President Prabowo has already made several large moves that his Government hopes will turbo charge Indonesia’s economy. The Government recognizes that investment will be crucial to its economic future. To facilitate greater investment, President Prabowo has launched “Danantara”, a state-owned super-holding investment company that aims to pool all the 47 State-Owned Enterprises (SOEs) under one administrative system, and channel SOE dividends along with additional funding into investments. With an initial fund of US$20 billion, Danantara is touted as a informativeness step, focused on high-impact, long-term projects.
Danantara plans to implement 10 to 15 major projects that will see an increase of 2-3% in GDP. Among these, the government is seeking investment to build three million houses annually over the next five years to address a significant shortfall in housing. The Indonesian Government has also announced a programme to widen access to the internet for all of Indonesia.
As part of the investment plan, Prabowo’s Administration is going full steam ahead with the previous Jokowi Administration’s “down-streaming” programme. This seeks to add value to Indonesia’s natural resources rather than simply exporting raw materials. This approach has been particularly successful in nickel production where Indonesia is a global leader and holds the lion’s share of the world’s reserves. The government aims to expand this model to bauxite, copper, and other minerals.
Meanwhile, the Government’s flagship, Free Nutritious Meals programme, is seen as a way to support the people, address stunting and improve nutrition, while also boosting economic growth. At full scale, this programme will see 82.9 million school children, as well as pregnant mothers, provided with free meals. President Prabowo also wants the programme to help boost Indonesian agricultural production and food security, including the dairy sector. It is, however, very costly.
Indonesia is projected to have the world’s seventh largest economy by 2030 and to be in the top five largest economies by 2050.
In June 2013, in his speech in Bali, President Susilo Bambang Yudhoyono expressed his high hopes; that in the 100th Anniversary of the Republic of Indonesia, the nation would rise to become a developed country in terms of economic, political, and social aspects, and also exercise considerable international influence in the region. He said; "I have a vision and a dream that in 2045 our economy will be truly strong and just, our democracy will mature, and our civilization will flourish.
Moreover, Indonesia is predicted to enjoy demographic bonus between 2030 and 2040, that will boost Indonesian development towards vision 2045 as a developed nation. By that time, the number of workforce or the population of productive age (aged 15–64 years old) is greater than the population of non productive age (aged at under 15 years and above 64 years old). During this period, the population of productive age is predicted to reach 64 percent of the total projected Indonesian population of 297 million.
Indonesia is also pursuing science and technology mastery, among others by developing its own aviation industry. On 30 December 2015 in Merauke, , President Joko Widodo wrote his vision titled "Indonesian Dream 2015–2085". In his notebook he wrote seven dreams of lofty goals for Indonesian future, they are:
1.Indonesian human resources whose intelligence outperforms other nations in the world
2.Indonesian people who uphold pluralism, cultured, religious, and uphold ethical values
3.Indonesia is the center of education, technology and world civilization
4.Society and government apparatus are free from corruption
5.Equitable infrastructure development throughout Indonesia
6.Indonesia is an independent and free country and one of the most influential in the Asia Pacific
7.Indonesia is a benchmark (example) of world economic growth
On 2017, the Ministry Ministry of National Development Planning Indonesia (Kementerian PPN-Bappenas) has finished formulating the vision. The vision was officially launched by President Joko Widodo on 9 May 2019. In this vision, the government set a target for Indonesia in 2045 to become the fifth largest economy in the world with a GDP of US$7.3 trillion and per capita income reaching US$25,000.
President Joko Widodo reiterated the vision once again during his second term inauguration speech in Parliamentary Complex on 20 October 2019. To achieve these goals, Joko Widodo has set five policies that he would implement during his second term administration between 2019 and 2024:
1.Continuing the infrastructure development
2.Developing human resource
3.Inviting investments to the maximum extent
4.Reforming bureaucracy
5.Ensuring that the state budgets spending are focused and better-targeted
( To be continued)
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