JAKARTA - The government assesses that global geopolitical dynamics, including conflicts in the Middle East, are still a factor that needs to be monitored because they have the potential to affect energy prices, global supply chains, and international investment flows.
However, behind these challenges, the government sees an opportunity for global economic stability to be created if peace efforts can be realized immediately.
Coordinating Minister for the Economy Airlangga Hartarto said that peace would have a positive impact on the world economic outlook as well as improve the smoothness of global supply chains, and both factors have a major influence on the Indonesian economy.
"Peace always produces positive results for the global outlook, for the global economy. And the second thing will also improve the supply chain. So these two things have a very big impact on the Indonesian economy. But what is clear is that peace has a positive contribution to the economy," he said in his statement, Wednesday, June 24.
Airlangga explained that global uncertainty due to geopolitical conflicts makes the market increasingly difficult to predict, this encourages investors to be more careful in making investment decisions and maintaining liquidity.
According to Airlangga, the Indo-Pacific region remains a safe and attractive area for global investment because ASEAN's economic growth is still above 4 percent and the stability of the region is supported by countries such as China, Japan, South Korea, Australia, and New Zealand as an important capital in maintaining investor confidence.
Amid global uncertainty, Airlangga said a number of special economic zones (KEK) in Indonesia also showed positive performance with high occupancy rates, even encouraging expansion plans in several areas as part of the ongoing global supply chain adjustment.
"The government also continues to maintain the stability of the rupiah exchange rate through the synergy of fiscal and monetary policies," Airlangga explained that Bank Indonesia's steps in maintaining the attractiveness of rupiah instruments are expected to reduce the pressure on capital outflow, which in turn needs to be supported by the entry of quality investments.
"The cooperation between fiscal and monetary is very good. Because we also meet temporarily. And we monitor third-party funds that are banked, then the distribution of credit, and of course the liquidity in this market is very necessary," he said.
In addition to focusing on domestic stability, the government is also actively expanding market access and investment through various international economic cooperation, one of the strategic steps being taken is the process of Indonesia's accession to the Organization for Economic Co-operation and Development (OECD), which has 38 members with an economic value of around 64 trillion US dollars.
He added that OECD membership is believed to be able to improve the quality of national regulations, strengthen investor confidence, and open wider access for Indonesia to the global market.
In addition, Airlangga explained that in the world economic landscape that is increasingly multi-block, Indonesia also continues to expand economic cooperation through various strategic forums, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA).
Specifically for IEU-CEPA, the agreement is projected to open more competitive access for Indonesian manufacturing products to the EU market, which has an economic value of around US$ 21 trillion with a population of 723 million.
Through the full implementation of the agreement, various Indonesian products have the potential to enjoy the elimination of entry tariffs which are currently still in the range of 10-20 percent.
Airlangga said that to maintain the momentum of economic growth in the second semester of 2026, the government has also prepared an economic stimulus package worth Rp. 26.34 trillion.
He added that the stimulus includes support for the transportation and tourism sectors of Rp2.04 trillion, apprenticeship and vocational programs of Rp6.26 trillion, and food assistance worth Rp18.04 trillion.
Furthermore, Airlangga conveyed that in order to face various global risks in the future, the Government continues to strengthen the strategy of diversifying energy and raw material supply sources.
Airlangga emphasized that the experience during the Covid-19 pandemic and various international conflicts was an important lesson so that Indonesia would not depend on one country or one specific source of supply.
Currently, Indonesia's oil import dependence from the Middle East region is only around 20 percent, while alternative supplies have been available from various other countries, including a number of countries in Africa.
Airlangga said the government also anticipated the potential impact of the El Nino phenomenon on national food security through increased agricultural production and strengthening supporting infrastructure, including the pump program to maintain water availability in areas that are potentially experiencing drought.
"The Indonesian economy is basically solid. And the business is strong. So resilient. So we will continue to encourage that in addition to resilience, later it can enrich the community," he concluded.
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