East Asia’s Rising Star
By Sri Mulyani Indrawati, New Europe, February
25, 2018
25, 2018
At
the World Bank Group’s Annual Meetings in Washington, DC, in October, there was
notable optimism in anticipation of an upswing in the global economy. The
International Monetary Fund’s latest World Economic Outlook projects that
global growth will accelerate to 3.6% in 2017, and to 3.7% in 2018. Not
surprisingly, investment, trade, industrial production, and business and
consumer confidence have continued to increase in several key economies and
regions.
the World Bank Group’s Annual Meetings in Washington, DC, in October, there was
notable optimism in anticipation of an upswing in the global economy. The
International Monetary Fund’s latest World Economic Outlook projects that
global growth will accelerate to 3.6% in 2017, and to 3.7% in 2018. Not
surprisingly, investment, trade, industrial production, and business and
consumer confidence have continued to increase in several key economies and
regions.
Indonesia
intends to capitalize fully on this upswing. In 2017, it consistently posted a
respectable growth rate of around 5% – better than most emerging economies –
owing to increased investment and consumption, and a recovery in exports,
partly owing to the pick-up in commodity prices. In fact, exports are becoming
an increasingly reliable third engine of growth for the country.
intends to capitalize fully on this upswing. In 2017, it consistently posted a
respectable growth rate of around 5% – better than most emerging economies –
owing to increased investment and consumption, and a recovery in exports,
partly owing to the pick-up in commodity prices. In fact, exports are becoming
an increasingly reliable third engine of growth for the country.
Better
still, Indonesia’s macroeconomic indicators are sound. The country is
experiencing solid growth in new jobs and real wages, and low and stable
inflation of around 4%. Moreover, food prices are steady, consumer confidence
is strong, interest rates are low, and the exchange rate has remained
consistent. Domestic and foreign direct investment have been picking up, too,
thanks to increased infrastructure spending.
still, Indonesia’s macroeconomic indicators are sound. The country is
experiencing solid growth in new jobs and real wages, and low and stable
inflation of around 4%. Moreover, food prices are steady, consumer confidence
is strong, interest rates are low, and the exchange rate has remained
consistent. Domestic and foreign direct investment have been picking up, too,
thanks to increased infrastructure spending.
These
positive trends have added momentum to ongoing reforms. After all, the best
time to mend one’s roof is when the sun is shining.
positive trends have added momentum to ongoing reforms. After all, the best
time to mend one’s roof is when the sun is shining.
Accordingly,
President Joko Widodo’s government is pushing ahead with key measures that will
create a strong foundation for higher long-term competitiveness. And alongside
structural reforms, we are pursuing prudent fiscal and monetary policies, with
our sights set well beyond the horizon. The proof of Indonesia’s progress is in
the pudding. Indonesia has gained growing international recognition, with three
major rating agencies having issued the country an investment-grade credit
rating. According to an OECD/Gallup poll, 80% of Indonesians have confidence in
the national government – the highest among all countries surveyed.
President Joko Widodo’s government is pushing ahead with key measures that will
create a strong foundation for higher long-term competitiveness. And alongside
structural reforms, we are pursuing prudent fiscal and monetary policies, with
our sights set well beyond the horizon. The proof of Indonesia’s progress is in
the pudding. Indonesia has gained growing international recognition, with three
major rating agencies having issued the country an investment-grade credit
rating. According to an OECD/Gallup poll, 80% of Indonesians have confidence in
the national government – the highest among all countries surveyed.
Moreover,
Indonesia’s standing in the World Bank’s “Ease of Doing Business” ranking has
skyrocketed 34 places since the current government took office in 2014. Owing
to its improved business and investment climate under President Joko Widodo’s
leadership, Indonesia has been named a top-ten reformer.
Indonesia’s standing in the World Bank’s “Ease of Doing Business” ranking has
skyrocketed 34 places since the current government took office in 2014. Owing
to its improved business and investment climate under President Joko Widodo’s
leadership, Indonesia has been named a top-ten reformer.
Toward
the end of 2017, the Indonesian parliament approved a robust 2018 national
budget, which aims to boost confidence further, increase productivity, and
enhance the country’s competitiveness. For the past three years, the government
has pushed hard to invest in the future by closing the country’s infrastructure
and human-capital gaps. The new budget will continue that work by increasing
investments in both areas to unprecedented levels.
the end of 2017, the Indonesian parliament approved a robust 2018 national
budget, which aims to boost confidence further, increase productivity, and
enhance the country’s competitiveness. For the past three years, the government
has pushed hard to invest in the future by closing the country’s infrastructure
and human-capital gaps. The new budget will continue that work by increasing
investments in both areas to unprecedented levels.
Even
more than our natural resources and strategic location, our people are the most
precious assets of all. As the world’s fourth most populous country, Indonesia
has a large and vibrant young workforce that will fuel inclusive growth well
into the future. Indonesian millennials are more connected, creative, and
confident than any previous generation. They are our future entrepreneurs, job
creators, professionals, civil-society leaders, and taxpayers. And they are
already competing vigorously in the digital economy, where technological
innovations will continue to introduce new opportunities and challenges.
more than our natural resources and strategic location, our people are the most
precious assets of all. As the world’s fourth most populous country, Indonesia
has a large and vibrant young workforce that will fuel inclusive growth well
into the future. Indonesian millennials are more connected, creative, and
confident than any previous generation. They are our future entrepreneurs, job
creators, professionals, civil-society leaders, and taxpayers. And they are
already competing vigorously in the digital economy, where technological
innovations will continue to introduce new opportunities and challenges.
The
next generation will have to start preparing today for the jobs and
opportunities of tomorrow. To that end, the government has placed special
emphasis on investments in human capital. More than 20% of the 2018 national
budget is allocated for education and vocational training; and another 5% is
dedicated to the health sector.
next generation will have to start preparing today for the jobs and
opportunities of tomorrow. To that end, the government has placed special
emphasis on investments in human capital. More than 20% of the 2018 national
budget is allocated for education and vocational training; and another 5% is
dedicated to the health sector.
Furthermore,
the government is providing support for the country’s poorest and most
vulnerable communities. Through social safety nets, cash transfers,
cash-for-work programs, and other innovations, we are lifting people out of the
vicious cycle of poverty. The government’s flagship “Indonesia Pintar”
education program will ensure that around 20.3 million school-age children stay
in school. The “Indonesia Sehat” health initiative is expanding access to basic
health services for the masses. And large-scale microcredit programs have been
introduced to kick start local economies.
the government is providing support for the country’s poorest and most
vulnerable communities. Through social safety nets, cash transfers,
cash-for-work programs, and other innovations, we are lifting people out of the
vicious cycle of poverty. The government’s flagship “Indonesia Pintar”
education program will ensure that around 20.3 million school-age children stay
in school. The “Indonesia Sehat” health initiative is expanding access to basic
health services for the masses. And large-scale microcredit programs have been
introduced to kick start local economies.
With
more than 17,000 islands spread over three time zones, Indonesia is the world’s
largest archipelago. Fortunately, ongoing investments in infrastructure will
leave the economy more interconnected than it has ever been. As logistical
costs fall and efficiency improves, we will likely see the emergence of new
growth centers beyond the main islands.
more than 17,000 islands spread over three time zones, Indonesia is the world’s
largest archipelago. Fortunately, ongoing investments in infrastructure will
leave the economy more interconnected than it has ever been. As logistical
costs fall and efficiency improves, we will likely see the emergence of new
growth centers beyond the main islands.
Lastly,
the government is working hard to strengthen Indonesia’s institutions. We have
introduced a comprehensive tax-reform plan to make collection more effective,
and to broaden the tax base. And we are taking steps to ensure financial
inclusion, and to improve trade and investment policies, all of which will fuel
competitiveness.
the government is working hard to strengthen Indonesia’s institutions. We have
introduced a comprehensive tax-reform plan to make collection more effective,
and to broaden the tax base. And we are taking steps to ensure financial
inclusion, and to improve trade and investment policies, all of which will fuel
competitiveness.
Any
businessperson or investor who overlooks Indonesia risks missing out on the
opportunities offered by a global economic success story. As a member of the G20,
Indonesia is the largest economy in Southeast Asia, and on its way to becoming
the fifth largest economy in the world by 2030. When Indonesia thrives,
everyone benefits.
businessperson or investor who overlooks Indonesia risks missing out on the
opportunities offered by a global economic success story. As a member of the G20,
Indonesia is the largest economy in Southeast Asia, and on its way to becoming
the fifth largest economy in the world by 2030. When Indonesia thrives,
everyone benefits.
Indonesians
are doing their part to contribute to the dynamism of East Asia. As the
Indonesian economy continues to gain momentum, so, too, will the current
government’s efforts to establish a strong foundation for the future.
are doing their part to contribute to the dynamism of East Asia. As the
Indonesian economy continues to gain momentum, so, too, will the current
government’s efforts to establish a strong foundation for the future.
