DEN: Trump's Deportation Policy Potentially Affects The Indonesian Economy

Member of the National Economic Council Chatib Basri (center)/ANTARA/Andi Firdaus

JAKARTA - Member of the National Economic Council (DEN) Chatib Basri revealed that the policy of deportation of undocumented or illegal workers in the United States (US) by President Donald Trump's administration has the potential to have a broad economic impact, including for Indonesia.

In a meeting with President Prabowo Subianto, at the Presidential Palace complex, Jakarta, the DEN discussed the risks of the policy, especially regarding its impact on inflation in the US and the United States central bank interest rate policy, The Fed.

"Because there is a lot of work in the United States, especially those who are unskilled, are held by workers with low wages, many of whom are undocumented workers," he said as quoted by ANTARA, Thursday, February 6.

The economist, researcher, and professional who once served as Minister of Finance of Indonesia for the 2013-2014 period explained that many jobs in the US, especially in the low-form labor sector, are filled by undocumented workers. If they are repatriated, the position must be filled by workers with higher wages, which has the potential to encourage an increase in inflation in the US.

"If inflation in America is going up, then the Fed may not be easy to lower interest rates, it might even increase interest," said Chatib.

According to him, this condition risks maintaining high interest rates in the US and strengthening the value of the dollar, which could have an impact on Indonesia's economic stability.

Therefore, the DEN recommends that the Indonesian government strengthen structural reforms in order to anticipate the impact of global economic policies arising from this.

President Prabowo, said Chatib, supports measures such as simplifying licensing, improving the investment climate, and accelerating the implementation of digital government technology (GovTech) to increase bureaucratic efficiency and national economic competitiveness.

Present at the meeting were Chairman of the National Economic Council Luhut Binsar Pandjaitan, along with his members including Septian Hario Seto, Firman Hidayat, and Chatib Basri.