Coordinating Minister Airlangga Convinced Global Fundal Investors Of The Indonesian Economy Strong
Coordinating Minister for Economic Affairs Airlangga Hartarto assured global investors that Indonesia's economic fundamentals remain strong amid the uncertainty of the world economy.
This is reflected in Indonesia's economic growth in the third quarter of 2024 which was recorded at 4.95 percent. According to him, this achievement is better than several countries such as Singapore (4.1 percent), Saudi Arabia (2.8 percent), and Mexico (1.5 percent).
First of all, Indonesia has managed to grow in the range of 5 percent in the last decade. Few countries like Indonesia are able to control inflation below 2 percent. In my opinion, our debt to GDP ratio is also very low, around 40 percent," said Airlangga in his statement in Jakarta, quoted from Antara, Sunday, December 1.
The unemployment rate (as of August 2024) also decreased to 4.91 percent when compared to August 2023 of 5.32 percent. Then, the number of workers increased by 4.7 million people from 139.9 million (August 2023) to 144.6 million people (August 2024), with a proportion of 42.05 percent being formal workers, and 57.95 percent being informal workers.
Yesterday President Prabowo announced a minimum wage increase next year of 6.5 percent. So, it is higher than economic growth. In my opinion, maintaining the middle class in Indonesia is very important, because our goal is to become an upper middle-income country. So we want to accelerate development, so that within 10 years we can reach the per capita income rate above 12 thousand US dollars," he explained.
According to him, currently there are also several provinces in Indonesia whose per capita income is quite high. For example, in Jakarta it is 22 thousand US dollars, then in East Kalimantan and several provinces on the island of Sumatra have a per capita income of around 17 thousand US dollars.
"So, the task of the Government is how to be more equal, there is no disparity between one region and another. Therefore, one way is to build Indonesia based on the Indonesian-centric that the center of gravity moves from Java Island to Eastern Indonesia, and the Government has built 22 Special Economic Zones (SEZs) for that," said Airlangga.
The Coordinating Minister explained that in the last 10 years, Indonesia has also been quite active in its membership in various multilateral economic forums. For example, Indonesia is the initiator of the Regional Comprehensive Economic Partnership (RCEP), one of which includes China in it, then together with the US also formed an Indo-Pacific Economic Framework for Prosperity (IPEF).
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Indonesia is also in the process of accessing it to become a member of OECD and BRICS. According to him, the purpose of signing these multilateral agreements is to open new trade markets, improve and align trade and financial standards, and attract more investment which will create more jobs as well.
"Because our investment target this year is around Rp. 1,900 trillion, and I think next year more than Rp. 2,100 trillion will be needed in investment, so we need more friends' and investors," said Airlangga.
The interest of global investors in coming to Indonesia is not only driven by the huge potential of the export market or because it is interesting that domestic markets have strong consumer purchasing power, but they must be able to trust the rule of law in Indonesia, and know that Indonesia obeys global values regarding the environment, business practice, transparency, and there is no corruption.
"If you want to grow, then grow with Indonesia," he added.