Misinterpretation Of Indonesia As A Developed Country

Indef press conference with the theme "Misguided Status of Developed Countries", in Jakarta, Thursday 27 February. (Mery Handayani / VOI)

JAKARTA - Indonesia is predicted to hold the status of a developed country at least 10 years from now when referring to the economic and social indicators according to the Countervailing Duty (CVD) law. However, for now Indonesia is still not included in the indicators of developed countries.

CVD is the act of applying additional levies on imported products from a country. Senior Economist at the Institute of Development for Economics and Finance (INDEF) Aviliani said the United States' decision to remove Indonesia from the list of developing countries to become a developed country was not right. According to him, the government can reject this decision like the Chinese government's move.

Aviliani said that the United States only uses assessment indicators from an economic point of view. Indonesia is considered to have an export share of more than 0.5 percent in the world and is one of the members of the G-20.

"Indonesia could be a developed country, but it will probably only be 10 years from now. In my opinion, Indonesia's condition will improve in the next 10 years. However, this must be achieved with various efforts," he said, during a press conference with the theme "Misguided Status of Developed Countries" , at ITS Tower, Pasar Minggu, Thursday, February 27.

Parameters as a developing country in terms of the economy in which the gross national income (GNI) per capita is below 12,375 thousand US dollars. Meanwhile, based on BPS data, the realization of 2019 was only 4,100 United States (US) dollars. However, this is not an important consideration.

Aviliani considers that the United States does not refer to the parameters of social development. Such as the poverty rate, infant mortality rate, adult literacy rate, and life expectancy in Indonesia today.

Then, continued Aviliani, which became a record of residents with a population expenditure level of below 1.9 US dollars per day in Indonesia reached 5.7 percent and 3.2 US dollars per day as much as 27.3 percent.

"Meanwhile, high income countries (high inconomies) were 0.6 percent and 0.9 percent, respectively. The gap is very far," he said.

Regarding exports, Aviliani confirmed that Indonesia's export share of total world exports in 2018 reached 0.9 percent. However, he considered it was not enough to make Indonesia a developed country because it was not supported by other indicators, such as GNI per capita or other welfare indicators.

Smallest Export from G20 Countries

However, Aviliani emphasized that even though Indonesia's export share to the world reached 0.9 percent, Indonesia's export ranking actually dropped to level 29 in 2018. Indonesia and Turkey also recorded the smallest export performance among other G20 member countries.

"Indonesia's exports are currently below Vietnam, Thailand and Malaysia. The role of exports to GDP (gross domestic product) has only reached 20-25 percent. This realization is far behind Vietnam, which has reached 105 percent of GDP," he explained.