“But our growth was below that. If we continue to grow below that, mathematically, our GNI (gross domestic product/GDP) per capita in 2045 may be below 12 thousand US dollars and we will (experience a similar fate like) China in experiencing the middle-income trap," he observed during a meeting with Commission XI of the House of Representatives, which was followed online from here on Monday.
According to him, annual economic growth of six to seven percent can potentially be achieved by Indonesia to seize the demographic bonus advantage, which is estimated to end in 2037 to 2040.
“After that, we will transition to an aging society with a declining productivity level, unless we can create good jobs for people over the age of 60. (Thus) this must be pursued, else we are trapped as a middle-income country,” he stressed.
He estimated that by the end of 2022, Indonesia's per capita income would reach US$4,200, thus it could be considered an upper-middle income country.
Before the COVID-19 pandemic, the parameter had been achieved. However, Indonesia regressed to lower-middle-income country status in 2020 due to the spread of the pandemic, which compromised people's productivity.
The National Planning and Development Ministry has continued to formulate programs to push Indonesia out of the middle-income trap, supported by coordination from ministries and agencies that are implementing every plan.
Indonesia is targeting to achieve net-zero emissions by 2060 by cutting emissions by 29 percent through its own efforts by 2030 and by 41 percent with assistance from the global community, which has prompted it to propose a discussion on blended finance during its G20 Presidency, the minister said.
"During the Indonesian G20 Presidency, the National Planning and Development Ministry has proposed a discussion of blended finance so that the G20 countries would adopt one of them to make an energy transition, which is part of the achievements of the SDGs (sustainable development goals), in order to replace power generation sources with cleaner energy," he informed.
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Translator: Sanya D S, Mecca Yumna
Editor: Rahmad Nasution
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