Mr. Jokowi Be Careful! Observers Say, Commodity Shock Can Make The Economy Can Retreat Five Years

Illustration of mining goods processing (Photo: Doc. Antara)

JAKARTA – An economic observer from Verdhana Sekuritas Heriyanto Irawan said that Indonesia is one of the countries that will benefit from trading in natural resource-based commodities. According to him, the export of various leading commodities is one of the important drivers of the high rate of formation of gross domestic product (GDP).

"During the commodity boom, Indonesia's GDP increased five times from US$700 per capita in 2000 to US$3,500 per capita in 2010," he said while giving an online presentation to media crews, Friday, May 13.

However, Heriyanto explained that there is actually a danger for the country if it only relies on commodity trade as a source of economic growth.

“After the commodity bombing ended, the economy 'nyungsep'. Even though it fell a little, our economy immediately retreated five years. This is something we don't want to experience right now," he said.

From the data shared by Heriyanto, it is known that currently Indonesia's GDP per capita is at the level of 4,300 US dollars. This amount is estimated to reach around US$10,000 by 2030 if the government does not only depend on trading in raw commodities, but also processes these raw materials into high-value products.

"So how important it is that we don't just rely on commodities, but we must carry out an added value process so that our exports can be more stable. This strategy is important so that we can fund our own national growth,” he stressed.

As is known, Indonesia is currently experiencing a windfall, aka a windfall, from the high prices of various commodities. Exports of superior goods such as palm oil (CPO) and coal are the catalysts for the skyrocketing state revenues from late 2021 to early 2022.

This situation will not always happen, considering that when the global economy improves, the decline in commodity prices, especially energy, will certainly slow down.