Political Stability Claimed To Be Able To Determine Indonesia's Economic Status

Coordinating Minister for Economic Affairs Airlangga Hartarto. (Photo: Doc. Antara)

Coordinating Minister for the Economy Airlangga Hartarto assessed that political stability was able to determine Indonesia's economic status in terms of whether Indonesia became a middle or high-income country.

"Political stability will determine whether Indonesia will become a middle-income country or Indonesia will become a high-income country, with per capita income above 10,000 US dollars," said Coordinating Minister Airlangga in an official statement in Jakarta, quoted from Antara, Tuesday, August 8.

This was conveyed by Airlangga at the Democracy Dialogue event organized by The Jakarta Post.

According to him, the implementation of a good democratic system can be a way to maintain political stability in Indonesia. By undergoing ASEAN Chairship in 2023, Indonesia currently wants to lead by providing examples as the third largest democracy in the world and at the same time the largest in the ASEAN region.

Coordinating Minister Airlangga assessed that it is important for all leaders to prioritize cooperation and dialogue in maintaining national stability, achieving prosperity, and maintaining democracy. Therefore, in the long term, democracy will bring benefits to Indonesia.

Then Coordinating Minister Airlangga explained, compared to five to ten years ago, global democracy showed a decline and stagnation. This was confirmed in the 2022 Democracy Index report released by the Economist Intelligence Unit (EIU) in 2023. This phenomenon occurred globally and was reflected in the scores of each region.

The average regional score between Asia and Australia in 2022 is still the same as the previous year, namely at the level of 5.46. Indonesia itself scored 6.72 or still the same as the score in 2021, but has increased significantly from the score of 6.30 in 2020.

"Based on the 2022 Democracy Report from the V-Dem Institute, it states that there has been a decline in the quality of democracy in Southeast Asia which leads to an autocratic regime. But Indonesia will not experience an autocratic regime. Indonesia is one of the multiparty countries in the world," said Coordinating Minister Airlangga.

Furthermore, there is evidence that shows a strong and interactive relationship throughout history between democracy and economic growth. A study conducted by MIT showed that countries that turned to democratic rule experienced 20 percent increase in GDP over a 25 year period, compared to what would happen if they remained authoritarian countries.

This shows that it takes time and stable progress for democracy to improve the economy and the standard of living of the community.

In addition, Coordinating Minister Airlangga also explained about the development of Indonesia's relationship as one of the key partners with the Organization for Economic Co-operation and Development (OECD). Indonesia is currently focusing on encouraging the use of Indonesia's demographic advantage which will reach its peak within 13 years or in 2035.

"This can be a potential for Indonesia to become the largest economic country in the world by taking advantage of this demographic bonus," he also said.