“So, in the midst of this COVID-19 pandemic, we will (work to) restore the economy. It will be difficult or impossible if only the government is doing this. Hence, the government must be able to invite, urge, encourage the private sector to participate,” Sadikin said during an online discussion organized by the National Resilience Institute (Lemhannas), here on Tuesday.
Currently, the private sector’s contribution to the national economy is around 60-70 percent, with state-owned enterprises (SOEs / BUMN) and the government accounting for the rest, he noted.
Efforts to involve the private sector could be carried out by the government by issuing attractive regulations, he suggested.
Unlike the administrations of President Sukarno and President Soeharto, where the state budget had a major role in stimulating the national economy, at present, the private sector plays a bigger role in economic growth, he remarked.
“In the past, most of Indonesia was held or influenced by the state budget, it (economic activity) was (boosted by) government spending. Hence, in the past, during the eras of Bung Karno (Sukarno) and Pak Harto (Soeharto), (if they) wanted to move the Indonesian economy, (they could) just tell the ministers to spend the budget, and make sure the money was spent; it certainly worked for the economy,” he elaborated.
The present context is different, he continued. Indonesia's GDP is currently pegged at US$1 trillion, or around Rp14,500 trillion, and the APBN (State Budget) of Rp2,400 trillion only contributes around 13 - 15 percent to the national economy, he explained.
“No matter how much the government encourages spending, the impact on the economy will not be as big as during the days of Bung Karno and Pak Harto. It's important for us to realize the context of the current Indonesian economy and the role of SOEs ,” Sadikin, who is concurrently chairman of the National Economic Recovery and Transformation Task Force, said.
The Head of State has two instruments to boost the Indonesian economy — the budget of ministries/institutions and the BUMN.
“Those two pillars of the Indonesian economy constitute approximately 30-35 percent of the total national economy,” he remarked. (INE)
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EDITED BY INE
Translator: Zubi Mahrofi, Fardah
Editor: Suharto
Copyright © ANTARA 2020
