Constitutional Court Rejects Lawsuit For Dispute In The 2024 Presidential Election, Economists Predict To Be Encouraging Investment In Indonesia

Economic Analyst of the Indonesian Employers' Association (Apindo) Ajib Hamdani. (Photo: Special)

JAKARTA - Economic analyst of the Indonesian Employers' Association (Apindo) Ajib Hamdani assessed that the decision of the Constitutional Court (MK) to reject the entire 2024 presidential election dispute (Pilpres) was a fairly positive result for investment and the business world.

The reason is, in principle there are 2 (two) things that are considered by economic stakeholder decisions.

"The first is certainty. This is related to risks. This Constitutional Court decision tends to be accepted by some people and relatively does not cause political and social turmoil," he explained in his statement, Tuesday, April 23.

Ajib said that this kind of stability provides positive incentives because the level of risk becomes small, so that the investment and economic certainty side becomes more measurable.

The second consideration, he said, is the yield factor, or the level of profit.

In this context, the Indonesian Economy offers abundant potential.

Ajib said that it consists of natural resources, superior commodities, to local domestic demand which reaches 280 million people. And, Indonesia's Gross Domestic Product (GDP) is temporarily significantly supported by household consumption.

"This means that the increase in added value, manufacturing and investment still have a large portion and potential to increase in this GDP ratio. When certainty and yield levels can be optimal, the economy will be scaled more optimally," he said.

Ajib said that the Constitutional Court's decision was a breath of fresh air for the national economy.

In parallel, geopolitical conditions and global economic policies are not favorable. Because the conflict between Iran-Israel which continues to heat up, it is unpredictable when it can subside.

Global monetary policy triggered by the high rate of the Fed's benchmark interest rate also puts pressure on the rupiah exchange rate.

Ajjib hopes that with this national positive condition it will provide a stronger multiplier effect than the global contradictions that are currently happening.

According to Ajjib, macroeconomic indicators which are a measuring tool for improving people's welfare are reflected in economic growth.

On the one hand, Indonesia's economic growth grew quite aggressively after the pandemic. However, the problem is a downward trend.

As for 2022, economic growth in aggregate reached 5.31 percent, while in 2023 it decreased to 5.05 percent.

Meanwhile, the economic growth target for 2024 is 5.2 percent.

Ajib conveyed this, of course, requires support for political and social stability, which is a basic prerequisite for investment and market confidence.

"Especially then, if we look at and criticize future programs, which are carried by Prabowo and Gibran as stated in Asta Cita, including continuing to encourage downstreaming, of course this requires a large flow of investment," he explained.

Ajib said that other programs regarding increasing employment, of course, require the quality of investment that is better able to absorb labor.

Due to data for the last 4 (four), from 2019 to 2023 investments have always reached the target, but employment has not reached the target.

According to Ajib, the Constitutional Court's decision is also a variable driving large and quality investment flows.

"By observing some of these economic indicators, in general the decision of the Constitutional Court provides positive incentives for strengthening the national economy," he concluded.