JAKARTA - The Indonesian Center of Reform on Economics (CORE) said that there are a number of heavy homework (PR) that must be carried out by the elected president Prabowo Subianto to encourage economic growth in order to achieve the target set at 8 percent.
For your information, the elected president Prabowo Subianto targets Indonesia's economic growth to reach 8 percent during his leadership. This target is much higher than the 2025-2045 National Long-Term Development Plan (RPJPN) which is only 6.5 to 7 percent.
Executive Director of CORE Indonesia Mohammad Faisal said that to achieve the 8 percent economic growth target, there is homework to be done. Moreover, he said, Indonesia's economy in 2024 has a high growth of 5 percent.
The reality this year is that the range is 4.9 to 5 percent. So it hasn't changed much compared to the last 10 years of the Jokowi administration," he said in a discussion on Economic Risk Mitigation ahead of the New Government, in Jakarta, Tuesday, July 23.
Therefore, Faisal said Prabowo needed to have a new breakthrough or strategy in his policy in order to encourage economic growth. According to him, Prabowo could learn the policies taken by the previous government.
Especially, continued Faisal, regarding Indonesia's economic growth targets in the midst of global conditions that are still not stable. This is because the domestic economy is not yet really safe and the government must focus on policies that will ultimately affect domestic economic growth.
"And this needs to be anticipated for this risk because it will be very possible if there is no breakthrough in terms of economic policy strategies, it will miss the economic growth again," said Faisal.
Focus On Manufacturing Industry
Faisal said that to achieve economic growth of up to 8 percent, the next government must focus on the manufacturing industry. He considered the industry to be an economic driver even in ASEAN countries.
In the government of President Joko Widodo (Jokowi), continued Faisal, downstreaming is one of the strategies to encourage the manufacturing industry to economic growth. Although, Faisal sees that downstream mining is not perfect because it has only been implemented for ferronickel nickel commodities.
The manufacturing industry is the main driver of growth as well as learning from the experience of Asian countries that are already more successful than we encourage economic growth. So you have to encourage the industry first," he explained.
Hunting Faisal, downstreaming of the agricultural sector can be an option to boost the manufacturing industry. This is because the potential for agriculture is much greater and the absorption of labor is far more than in the mining sector.
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"This can be expanded to the agricultural sector because the coverage is agricultural plantations, there are forestry livestock, only learning from the weakening that has occurred from downstreaming that has occurred in the last 10 years," he said.
Local Economic Movement
Faisal said the free nutritious food program launched by the Prabowo Subianto-Gibran Rakabuming Raka government must be able to move the local economy or use materials from small and medium enterprises (SMEs).
"So in the design which should later be monitored and evaluated, it is true that local SMEs will be extended, or later the products to become MBG supplies, maybe they still rely a lot on products produced by the company," he explained.
That way, continued Faisal, the program could have a multiplier effect on the domestic economy, especially local SMEs that contributed greatly to gross domestic product (GDP).
"Of course, it is not easy that there are dozens of teams that are solidly compact and also meritocracy in the selection of people in the cabinet is very important, especially the key position related to economic policies," he said.
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