Elected President Prabowo Subianto – Gibran Rakabuming Raka spoke about his belief in achieving an economic growth target of 8 percent per year.
Senior Economist Indef Dradjad Wibowo, reported by the media, said that in history, Indonesia had indeed experienced economic growth five times by 8 percent or more. The high economic growth occurred in 1968 (10.92 percent), 1973 (8.10 percent), 1977 (8.76%), 1980 (9.88%), and in 1995 (8.22 percent) . From its analysis of the trend of Indonesia’s economic growth from 1961-2023, the average economic growth of our economic is 5.11 percent per year, although in general Indonesia always has an opportunity for economic growth which reaches 8 percent.
Why did this happen? The current industrialization does result in investment and good capital accumulation. This investment disbursement has encouraged the increase in fiscal space that can be used as government spending, raising the volume of our export commodities, and ultimately increasing the ability of public consumption.
But on the other hand, opportunities for large economic growth and cannot be maximized are also formed by several problems. Indonesia still has a long, complicated bureaucratic chain, and also tends to be corrupt. The quality of the workforce produced by the world of education is often not absorbed because of skills that are not suitable for industrial needs. State intervention through economic policy, often too complicated in implementation, causes microeconomic actors who prefer the informal sector as a source of their livelihood. Practically in this perspective, we are waiting for at the same time warning the Prabowo-Gibran government with the Asta Cita that they are carrying, can cut the structural obstacles that exist.
Economic growth of 8 percent every year is indeed important because with this achievement Indonesia can be separated from the middle income trap (MIDDLE INCOME TRAP/MIT) and towards developed countries. Among the G20 countries, Indonesia is included in the early rows of countries with economic growth trends above 5 percent, under China and India.
What can be achieved to achieve 8%economic growth?
Real social justice. Prabowo-Gibran economic instruments in the upcoming policy package must remain prudent (careful) and focus on the inclusive economic path that empowering all sectors. This is important because the risk of miscalculation in translating high economic growth targets will cause social division that threatens the integration of our nation.
Inclined Economic Urgency. Chasing economic growth with a fair and equitable inclusive economy must be followed by the persuasive ability of the upcoming government to invite all components of the nation to be involved more in this project. Form a concise, clean, and agile bureaucracy. Third, the creation of economic added value through downstreaming and manufacturing investment must also produce new jobs. Creating a strong entrepreneurship climate, with adequate policy support to reduce unemployment.
October 18, 2024, CNBC Indonesia
(https://www.cnbcindonesia.com/opini/20241018113127-14-580767/target-pertumbuhan-ekonomi-8-prabowo-gibran-ilusi-atau-realistis)