LPS Boss Opens Up Causes Of Indonesia's Economy Difficult To Grow 6 Percent

Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudi Sadewa (Photo: dock. VOI)

JAKARTA - Chairman of the Board of Commissioners of the Purbaya Deposit Insurance Corporation (LPS) Yudi Sadewa admitted that he was surprised why Indonesia's economic growth was difficult to grow above 5 percent. In fact, he said, faster growth was very easy in the past.

Purbaya said that in the era of the Susilo Bambang Yudhoyono (SBY) administration, Indonesia's economic growth could be close to 6 percent. Meanwhile, in the era of President Joko Widodo (Jokowi) an average of 5 percent.

"It's a puzzle why in the past we grew faster. Now 5 percent just be grateful. In the previous days, SBY grew close to 6 percent, on average Pak Jokowi's era grew close to 5 percent, on average it didn't go down. Even though Pak Jokowi built infrastructure everywhere," he said in CNBC Indonesia Economic Outlook 2024, in Jakarta, Thursday, February 29.

According to Purbaya, with the more massive infrastructure development, Indonesia should develop faster.

"Everywhere with any calculations, our development should be faster. I see more data, I checked the credit growth rate 10 years ago almost 200 percent more now on average 7 percent," he explained.

From this data, Purbaya considered that the government was building an economy alone. Seen, he said, the sharia sector, banking, the private sector, and others did not help.

"But it's the government's own policy wrong, you work alone. You can't do this, sir. But changing that, it's not too easy. This paradigm of monetary policy makers also applies to LPS and BI (Bank Indonesia)," he said.

Therefore, according to Purbaya, the financial sector and the private sector need to be involved in the development of economic growth. With the involvement of the private sector and finances, consumption growth can be fast and can even reach 5 to 6 percent.

"If we fix it, the consumers will be very fast, maybe 5-6 percent, that's driving the economy. Second, there are anomalies in government spending on a large scale," he said.

"But at the end of the year, it's still not used, maybe IDR 600 to IDR 700 million every year for the last 5 years," he continued.

According to Purbaya, this may be difficult because of the bureaucracy. Therefore, he assessed that the increase in human resources (HR) needed to be done.

"It may be a bit difficult for the bureaucracy, we need to increase human resources. If it doesn't improve, the economy is 6 to 7 percent easy," he said.