Coordinating Minister Airlangga's Subordinates Say Prabowo's Target To Achieve 8 Percent Economic Growth Is Not Impossible

Expert Staff of the Coordinating Minister for Economic Affairs Raden Pardede. (Photo: Aris Nurjani/VOI)

JAKARTA - Expert Staff to the Coordinating Minister for Economic Affairs Raden Pardede revealed that the 8 percent economic growth target launched by Prabowo Subianto was not impossible to achieve.

"Of course we know this ambitious target. But it is not impossible. The target must be made ambitious so that we can work hard. Indonesia has achieved such growth," he said while representing Coordinating Minister for the Economy Airlangga Hartarto in Sarasehan 100 Economists, Wednesday, December 3.

Raden explained, because Indonesia's economic growth had reached 7.3 percent in the 1986-1987 period, it even reached 8.23 percent in 1996-1997.

According to him, to repeat this achievement, Indonesia needs extra effort and can optimize all growth machines, one of which is by encouraging investment.

"Investments need to continue to be encouraged to be high, even higher than the current position, namely by attracting a number of sources of financing to carry out various development programs," he said.

Raden said that high economic growth must be accompanied by investment efficiency. In addition, many capitals or capital that enter have not been maximized, such as the infrastructure sector which has not been utilized properly.

According to Raden, this can be handled by reducing the Incremental Capital Output Ratio (ICOR) figure.

Meanwhile, Indonesia's ICOR is still at 6.33 percent in 2023.

"We need to reduce ICOR and in the President's plan from 6.96 percent to around 4.5 percent," he said.

Raden said that if ICOR was not lowered, the demand for capital would be even greater and it was impossible to achieve an additional 8 percent to 9 percent capital in GDP.

This means that investment to GDP can reach 42-43 percent from now on 31 percent

"But if we lower ICOR, the need for investment will be much lower," he said.