The three challenges related to the investment sector are political stability, policy consistency, and people's purchasing power, he informed at the “Scientific Oration: Economic Transformation through Downstreaming with Local Wisdom” at the Ten November Institute (ITS), Surabaya, East Java, on Tuesday.
"The investment will come (if) three criteria (are met), first, political stability," he elaborated.
As the election year draws near in Indonesia, it is important to ensure that political stability is well maintained in order to gain investors' trust, he explained.
He quoted the chairman of the board and CEO of Freeport-McMoRan, Richard C. Adkerson, who said that at the beginning of the pandemic, the United States experienced political turmoil due to a change in leadership.
"The impact is on the direction of state policies, and today, there is a growth deficit for them. Indonesia will soon enter the election year. If we are not careful, it is not impossible that the same thing will happen," the minister warned.
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The next challenge is the sustainability and consistency of existing officials. Minister Lahadalia said that what must change is the policy, and not the leader, as people would not believe any leader if the policy remains the same.
He then outlined the final challenge—declining people's purchasing power since people are focusing on saving money.
"This is what can later become a big problem for the Indonesian people. In 2022, I am optimistic. However, 2023, from the bottom of my heart, I say (it is) full of caution. The question now is whether we want to survive the abyss we have seen or are we deliberately plunging ourselves?” he asked.
At a press conference followed from here on Monday, chairman of the board of commissioners of the Financial Services Authority (OJK), Mahendra Siregar, said that a global economic recession is almost certain in 2023, or even sooner.
"However, what cannot be predicted properly is how severe the recession will be and how long it will last," Siregar added.
However, the Indonesian economy will continue to grow at an estimated level of above 5 percent this year and next year, he said.
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Translator: Ade Irma J, Mecca Yumna
Editor: Suharto
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