Airlangga Hopes Iran-Israel Conflict Conditions Ease

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto hopes that global geopolitical conditions that are heating up in the Middle East between Iran and Israel will soon subside, aka descalation. Even so, the government continues to prepare various policies to respond to the global shock.

"We hope that there will be a descalation, but as an office responsible for the economy, we must prepare for various shocks," he said at his office, Central Jakarta, Tuesday, April 16.

Airlangga added that the condition of the Indonesian economy has not yet finished experiencing a global shock due to the Ukraine-Russia war, Israel-Hamas plus now by heating up conditions in the Middle East between Iran and Israel, causing the world condition of the cannot afford another war (not able to bear the war anymore).

"We haven't finished globally, the shock of the Ukraine war is still there, Israel-Gaza is still there. The world cannot afford another war (not able to bear the war anymore)," he said.

Airlangga said that after a limited meeting chaired by President Joko Widodo (Jokowi) together with a series of ministers and the Governor of Bank Indonesia (BI) after Iran's attack on Israel to try to control the impact of the war.

"So that was the message that the meeting with the president, all asked to control themselves, especially in countries that are fighting in the Middle East," he said.

According to Airlangga, in addition to the challenges caused by external conditions, Indonesia also faces various challenges from within the country, such as calibrating the subsidy budget, economic growth, inflation rates and interest rates.

"We are also faced with various domestic challenges, especially related to subsidies. We must re-liberate the budget used and of course we hope that this year we can maintain economic growth," he said.

In a situation like this, Airlangga said that there are several things that are of concern, namely, the global interest rate, oil prices that continue to soar, higher logistics prices, and also the SBN interest rate.

"We see America, the economic growth is good, then inflation is relatively better even though it is not as low as predicted, so many including the World Bank predict that the US dollar will be higher for longer, it will continue to be high," he said.

Airlangga said that currently the government continues to carry out structural reforms to maintain the economy, one of which is by maintaining capital inflows, so that foreign capital flows can be maintained by maintaining macroprodentials, the economy this year.

"I believe these things will become our common homework in the next 1-2 months, because this is the key in the final year of the presidency of Mr. Joko Widodo and Mr. Ma'ruf Amin. So that we must maintain growth and delivery from PSN can also be achieved at the end of this year. Thus, we must work harder because the world is also not okay," he said.

Airlangga also appreciated the performance of the line ministries of the economy who continued to come when invited to a meeting on Monday, April 15, even though they were in the moment of the Eid holiday.

"Yesterday I invited all the meeting, thank God, all of them came. A meeting was to prepare for the global shock caused by Iran and Israel," he said.