Airlangga Strengthens Synergy Between Indonesia And India To Encourage Economic Growth

Airlangga Hartarto (Doc. Coordinating Ministry for Economic Affairs)

JAKARTA - The Indonesian government continues to strengthen bilateral cooperation with various countries including with India, as part of efforts to expand the market and accelerate national economic growth.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that strengthening the international economy was carried out, to maximize Indonesia's economic potential, which is predicted to grow 5 percent in 2024 and 5.2 percent in 2025.

Airlangga said that under President Prabowo's leadership, Indonesia's economic growth is targeted to reach 8 percent by 2029. Judging by the achievements from 1986 to 1997, Indonesia was even able to grow by 8.2 percent in 1995 with the condition of Indonesia's ICOR at around 4 percent.

"To achieve the growth target of between 5.2 percent and 8 percent in the next five years, the Government is carrying out economic transformation through industrial downstreaming, strengthening the digital economy, developing new economies such as the semiconductor ecosystem, and energy transition," he said in his statement, quoted on Sunday, December 8.

Airlangga emphasized that to achieve this growth target, funding is needed to implement development and investment programs as the key to funding development.

"Indonesia will take the necessary steps to optimize infrastructure to reduce ICOR so that investment and productivity will become the main sector," said Airlangga.

To note, India is one of Indonesia's trading partners and in 2023, the trade value of the two countries reached 27 billion US dollars, growing 20 percent per year.

Airlangga hopes that this economic cooperation can continue and cover various sectors such as the digital sector, MSMEs, health, including the development of vaccines and pharmaceutical products, telecommunications, to other strategic sectors.

For Indonesia, India is a strategic partner not only in trade but also in investment. Indonesia needs to build a bridge with India that connects made in Indonesia and made in India," said Airlangga.

Airlangga explained that through the added value of manufacturing and downstreaming, it was able to increase growth in the region. Where currently Indonesia has Special Economic Zones (SEZs) with 22 sectors located in SEZs and 7 sectors are in the process, for downstreaming, establishing health centers, education centers, and digital data centers.

In addition, Airlangga explained that Indonesia's nickel exports increased from 4 billion US dollars in 2015 to close to 35 billion US dollars in 2023.

So, learning from nickel downstream can also be developed in other commodities, including the agricultural sector. Indonesia is the largest vegetable oil producer in the world with a production of around 50 million tons per year," said Airlangga.

The economic slowdown in several partner countries, such as China, has an impact on Indonesia's economic growth. However, Airlangga emphasized that Indonesia's economic fundamentals are still strong.

According to Airlangga, Indonesia's low inflation of 1.71 percent year-on-year reflects the effectiveness of the Government's policy in maintaining price stability and also people's purchasing power. Indonesia's debt ratio is also less than 40 percent of GDP.

Seeing Indonesia's strong economic fundamentals, Airlangga in the India-Indonesia Synergy Investment Forum encouraged the Indonesia-India partnership to strengthen the economy for the welfare of the people of the two countries.

"Let's take advantage of the opportunities that exist to strengthen our partnership further and create a prosperous future for our society," Airlangga concluded.