If Indonesia's Economic Growth Is Still 5 Percent In 2045, Say Goodbye To A Dream Of Becoming A Developed Country

Illustration. (Photo: Unsplash)

JAKARTA - Minister of National Development Planning/Head of Bappenas, Suharso Monoarfa, said that Indonesia needs at least 6 percent economic growth in a sustainable manner to be able to escape the middle-income trap and head for developed countries.

"This challenge can be overcome by transforming the economy from lower productivity to higher productivity," he said in a press conference, Thursday, April 29.

Suharso added, without changes in macroeconomic design, Indonesia could only achieve a growth rate of at most 5 percent.

"In our simple mathematical calculations, if growth is only 5 percent, by 2045 Indonesia will not be able to get out of the middle-income trap," he said.

Therefore, Suharso really hopes that the reform of the rules of the business and labor world which are contained in the Job Creation Law in order to help Indonesia become a developed country in the next twenty years.

"We predict that the neighboring Philippines will be able to get out of the middle-income trap in 2027 and Vietnam in 2043," he explained.

For information, a country can be classified as a developed country if the per capita income of its population has touched US $12,535.

Meanwhile, Indonesia, based on a report released by the Central Statistics Agency (BPS), has per capita income of US$ 3,911 or equivalent to Rp56.9 million with a Gross Domestic Product (GDP) posture of Rp15,434.2 trillion.

Meanwhile, Indonesia's economic growth rate in the last five years has been around the 5 percent level. It should be noted that this number was formed in normal conditions and before the pandemic. As for 2020, the growth rate contracted considerably to minus 2.07 percent.