Indef: RI Stuck In Middle Income Trap For The Last 32 Years

Rupiah (Photo: antara)

JAKARTA - Executive Director of the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti said, Indonesia has been trapped middle-income trap for the last 32 years.

This was conveyed by Esther during the 1st Anniversary of the Prabowo-Gibran Government in Jakarta, Thursday, October 16.

"Since 1993, we have been trapped in the middle income trap for 32 years, yes," he said.

Esther assessed that 5-6 percent economic growth is a must that needs to be achieved.

"It means, like it or not, like it or not, it grows more than 5 percent, yes, which is more than 6 percent, that's a must," said Esther.

Moreover, said Esther, the Prabowo Subianto government has an economic growth target of 8 percent by 2029.

According to him, 8 percent economic growth is not only driven by household consumption, but there are other driving factors.

"The target for 8 percent economic growth is the dominant component. This dominant economic growth engine cannot only be from household consumption, but must be exported and invested," he said.

He said that at least three steps could be taken in order to realize the 8 percent economic growth.

First, boost exports. According to Esther, efforts to boost exports can be done in two ways, namely product and market diversification.

Second, is the transformation of the green manufacturing industry. The reason, he said, is that the global market is currently focusing on products that use sustainable principles or sustainability.

"Because most of them (global market focus) sustainability certification. Don't let Mr. Rifqi (Minister of Creative Economy) want to export batik, eh, the dye is from non-sustainable chemistry, there are no standards, well, you can't enter. So, there must be something called conduct to standard sustainability," explained Esther.

The third step is to maximize the use of fiscals for productive activities. One of them is by providing subsidies to Indonesian products like what China does.

Thus, it is hoped that domestic products can compete in the national and global markets.