Nine Percent Economic Growth Is Considered Halucination

Workers brought cakes that had been produced at the J&C Cookies Factory, Bojongkoneng, Cimenyan, Bandung Regency, West Java, Thursday (31/10/2024). (ANTARA/Raisan Al Farisi/foc)

JAKARTA Hashim Djojohadikusumo's statement targeting Indonesia's economy to grow by up to nine percent is considered a mere hoax by economic observers.

"I'm sure it could be more than eight percent. Personally, I can get 9 percent of the economy. That's me personally," said Hasim some time ago.

This statement was made by Hashim Djojohadikusumo as the Presidential Special Envoy for Climate Affairs during the COP29 event in Baku, Azerbaijan. Hashim also replied to Prabowo's target that the Indonesian economy would grow eight percent in his leadership.

Hashim's confidence regarding Indonesia's economic growth of nine percent is not without reason. According to him, the government now has a number of programs that can help the economy grow higher, including a free nutritious eating program and the construction of three million houses every year.

Increasing economic growth has indeed become one of President Prabowo Subianto's targets with his representative, Gibran Rakabuming Raka, since being elected as the leader of this country for the 2024-2029 period. Prabowo himself once said about the eight percent economic growth target.

Economic growth can be said to be one of the indicators of the success or failure of a government in running, managing, and developing the country. Quoting Kompas, United States economist Simon Kuznets said economic growth is a long-term ability from the state to provide various economic goods to its residents.

On its way, Indonesia experienced ups and downs of economic growth. In 1961 in the era of President Soekarno, the Central Statistics Agency recorded Indonesia's economy at 5.74 percent. Although it was minus 2.24 percent, economic growth could return to positive at 3.53 percent in 1964.

In the era of President Suharto, Indonesia's economy grew rapidly. It even reached 10.92 percent in 1970 after making a five-year Development Plan or Repelita that encouraged self-sufficiency.

In the following years to around 1997, Indonesia's economic growth was maintained at around 6-7 percent. In 1998 when there was a global crisis, inflation was up to 80 percent and economic growth fell to minus 13.13 percent.

After that, in the BJ Habibie era, Abdurrahman Wahid, Megawati Soekarnoputri, to Susilo Bambang Yudhoyono, economic growth fell to around six percent. In the last 10 years, when Joko Widodo served as president, economic growth was arguably stagnant at five percent.

Regarding President Prabowo Subianto's target, which wants the economy to grow by eight percent, even Hashim Djojohadikusumo is very confident that it can reach nine percent, Director of the Center of Economic and Law Studies (CELIOS) Nailul Huda said it was impossible.

"Economic growth of eight percent is a hallucinations. Moreover, it has now increased to nine percent, more than hallucinations, dreams, dreams in broad daylight," said Huda when contacted by VOI.

What is clear is that the target is unrealistic and Hashim is saying nonsense. In the last 10 years, our economic growth has only been at five percent with various policies ranging from infrastructure to downstreaming," he added.

According to Huda, various policies in the Jokowi era did not have a major impact on economic growth which was still 'only'. President Prabowo, who wants to continue Jokowi's programs, makes this target impossible to achieve.

Even if there is an acceleration program, it is an HR program that incidentally has a long-term impact. Not in one year, two years, even five years. The impact may only be felt after 15 years. So I think it's very unrealistic," said Huda again.

Contacted separately, the Executive Director of CelIOS Bhima Yudhistira said the government must first change the structure of the economy if it wants its economy to grow positively. For now, said Bhima, the economic structure still relies too much on extractiveness. Countries with an economic structure whose basis is extractive are difficult to become developed countries for several reasons.

First, dependence on prices at the international level, second, environmental damage created, and the health impact of the process of exploiting natural resources, including downstream mining, actually reduces the level of labor productivity in the long term.

"Because if the worker is sick, then his productivity will decrease," explained Bhima.

According to Bhima, the government must accelerate the transition of energy to renewable energy with a larger domestic component. The energy transition to the green economy is said to be able to encourage job creation for the next 96 million people for the next 25 years.

Second, the government must encourage the development of a restorative economy, namely an economy that is in line with the restoration of nature or the environment. By involving the community more inclusively. Bhima explained, downstream mining, nickel does not have a big impact because the Indonesian economy remains at five percent.

"The downstreaming of this restorative economy has products such as coffee, fisheries, seaweed, forest products that can be managed sustainably and have added value. Because buyers in many countries currently want environmentally friendly products," he said.

Third, by developing the tourism sector to be managed properly and have higher competitiveness than neighboring countries such as Thailand, Singapore, Malaysia, so that they can bring in foreign exchange and encourage the economy at the regional level.

To encourage the growth of nine percent, continued Bhima, the state budget and fiscal incentives must be more targeted, must be oriented towards the labor-intensive sector, and create industrialization because the biggest challenge today is premature industrialization.

"So we have to industrialize it but not industrialize mining, because if it is still related to natural resources that are extractive in nature, it will be managed no matter how the value of the damage is very large compared to the profits obtained," Bhima explained.

"Finally building an economy on the outskirts, which is to direct business units in rural areas, the plantation agriculture sector with more focused village funds," he concluded.