Bambang Brodjonegoro: Increasing Productivity Is One Of The Conditions Towards A Golden Indonesia 2045

Special Advisor To The President For Economic Affairs And National Development Bambang Permadi Soemantri Brodjonegoro/PHOTO: Theresia Agatha-VOI

JAKARTA - Special Advisor to the President for Economics and National Development, Bambang Permadi Soemantri Brodjonegoro, said that one of the requirements for Indonesia Gold 2045 is to increase community productivity.

Given, the vision of Indonesia Gold 2045 aims to make Indonesia one of the world's economic powers.

In McKinsey's report, Indonesia is expected to become the seventh largest economy in the world by 2030 using a measurement of Gross Domestic Product (GDP) which has risen from its 16th position at this time.

"To achieve this growth target, Indonesia needs to increase productivity growth to 4.6 percent per year or 60 percent higher than the previous decade," said Bambang in his remarks at the 17th STIE Indonesia Banking School (IBS) Graduation event in the Mampang area, South Jakarta, Saturday, November 23.

The former Minister of Finance did not deny that currently the productivity level of the Indonesian people is still low when compared to countries that managed to get out of the middle-income trap.

Bambang explained, based on data from Total Factor Productivity (TFP), Indonesia's productivity level during 2005-2019 experienced negative growth of 0.66.

"This achievement is relatively lagging behind compared to for example South Korea

"which was able to reach 1.61 while still in the process of heading to developed countries in the period 1971-1995 and China which reached 1.60 in almost the same period," he said.

According to Bambang, this low productivity also has a direct impact on Indonesia's economic growth which tends to slow down.

The reason is, during the 2005-2010 period, the Indonesian economy was able to grow an average of 5.7 percent. However, this growth slowed to an average of 4.7 percent in the 2010-2015 period.

Then in 2015-2019, Indonesia's economic growth increased again to an average of 5 percent and reached 5.3 percent in 2022.

"Low productivity has led to a decline in Indonesia's potential economic growth. The COVID-19 pandemic in 2020 has also accelerated this decline with potential economic growth falling below 5 percent," he concluded.