It is important to escape the middle-income trap to achieve the Golden Indonesia vision, which envisages a sovereign, advanced, fair, and prosperous nation by its centennial year, that is, 2045.
“We only have about 21 years left (before 2045). For that, we must be able to escape the middle-income trap by growing our economy by at least 6 to 7 percent,” the ministry’s deputy for macro development planning, Eka Chandra Buana, said here on Thursday.
If the economy grows by 7 percent, he explained, Indonesia can escape the middle-income trap before 2040.
If it grows by 6 percent, he added, the country can do so by around 2041.
The government has set a number of targets to become a developed country by 2045: achieving a Gini income per capita of US$30,300, reducing poverty and inequality to nearly zero percent, and increasing human capital.
Indonesia is also aiming to increase its influence and leadership in the region as well as pursue sustainable environmental management and greenhouse gas emission reductions.
"These are the requirements that we must do to advance," Buana said.
To achieve this goal, several challenges will need to be overcome, he added.
First, Indonesia is still relatively behind other countries in terms of inclusive growth. This can be seen from the inclusive index, which is still lagging.
Second, income inequality in Indonesia is the second highest compared to other countries.
Furthermore, it has a low level of productivity, despite its important capital.
"If we compare with other countries in the region, Indonesia is somewhat behind, with our low human capital index,” he said.
“If we look at how the middle-class population is declining, it might be a trending topic now. If we look at various news that there will be termination of employment) of several million people. These are challenges for the economy in the future," Buana added.
In addition, its geopolitical and geoeconomic situation poses another challenge to accelerating Indonesia’s economic growth, not to mention the big gap between the country’s western and eastern regions.
“Those will also become our concerns on how to grow our economy,” he said.
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Translator: M. Baqir Idrus Alatas, Yashinta Difa
Editor: Azis Kurmala
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