Economist: Optimistic Golden Indonesia 2045, Indonesia’s Economy the Largest in ASEAN

Indonesia is currently still pushing various policies to make the vision of “Golden Indonesia 2045” a success. The idea, discourse, and concept of the Golden Generation 2045 emerged considering that in 2045 Indonesia will be exactly 100 years old, aka one century of Indonesia. Overall, the Vision of Indonesia 2045 is to realize a better and more equitable level of public welfare with higher human quality, as well as an economy that has increased to become a developed country and part of the 5 largest economic powers in the world. This vision also includes equitable distribution in all areas of development, within the framework of the Unitary State of the Republic of Indonesia which is sovereign and democratic, Indonesia’s investment climate is improved to become one of the best in the Asian region and the world. In achieving these ideals, Indonesia is equipped with various strengths that must be considered.

First, the population with the 4th largest workforce in the world, at 146.6 million. Second, optimizing demographic bonus opportunities. Currently, Indonesia is in the period of the lowest Population Dependency Ratio (Demographic Bonus Peak), which occurs only once in the history of a country’s civilization, so it must be optimized.

UOB Senior Economist Enrico Tanuwidjaja said that Indonesia is the country with the largest economy in Southeast Asia that has the most promising demographic bonus. Indonesia is also a strategic gateway to unlock the region’s economic potential.

“This is due to the advantages of the investment climate in the country. Indonesia is a competitive alternative manufacturing base and at the same time has strong domestic consumption, infrastructure optimization, technology utilization, and the development of a new capital city,” said Enrico.

Third, Indonesia’s strategic location in international trade. In addition, the influence of the season makes Indonesia an agricultural country. Fourth, the abundance of natural resources with large mineral reserves. Where Indonesia is ranked first in Nickel reserves (21 million MT), Bauxite ranked 6th (1 billion MT), Copper ranked 7th (24 million MT), Tin ranked 1st (0.8 million MT).

In terms of economic growth, Indonesia has been able to grow an average of 5.7% per year since 2016 by continuing to carry out structural reforms, utilizing the demographic bonus and technological advances, and increasing economic competitiveness.

Enrico also projected that the Indonesian economy would remain stable until the end of 2024. Bank Indonesia (BI) even projected that the Indonesian economy could grow positively this year in the range of 4.7% to 5.5% amid global uncertainty. The positive growth of the national economy is partly driven by high domestic consumption, especially in seasonal periods such as Ramadan and Eid al-Fitr 2024.

“We remain optimistic that Indonesia will be able to grow slightly from 2023. Our assumption remains the same, at 5.2%, supported by government consumption, higher government spending, and net exports that are still positive, and hopefully this will provide positive returns from household consumption,” he said.

In 2036, Indonesia is estimated to become a high-income country and the 5th largest gross domestic product in 2045. High and inclusive economic growth will increase the number of middle-income class to around 70% of Indonesia’s population in 2045.

Another strength that Indonesia has is driven by investment and trade. In 2045, the ratio of Foreign Direct Investment (FDI) Inflows to GDP is estimated to increase to 4.5% with an average investment growth estimated at 6.4% per year and the role of investment in GDP increasing to 38.1%.

September 4, 2024, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20240903083718-4-568619/pesawat-made-in-indonesia-n-219-diborong-kongo)