By: Nana Gunawan )*
Based on data from the Central Statistics Agency (BPS), in the 10 years of President Joko Widodo’s (Jokowi) administration for two terms 2014-2024, the Indonesian economy has managed to grow consistently amidst increasing global uncertainty. Strong involvement from the Government in advancing various sectors has been the key to driving sustainable economic growth. In fact, according to data from the Central Statistics Agency (BPS), economic growth in the first quarter of 2024 was 5.11 percent ( year on year/yoy ), an increase compared to growth in the previous quarter of 5.04 percent (yoy).
Minister of National Development Planning/Head of the National Development Planning Agency (PPN/Bappenas), Suharso Monoarfa said that Indonesia’s economic growth has always been stable at around 5 percent for the past 10 years during the era of President Jokowi. According to him, the realization of national economic growth is thanks to President Jokowi’s success in reducing poverty rates to single digits, which is 9.63 percent compared to 2014 which was 11.25 percent. Job opportunities are also available as many as 4.55 million, while in 2014 there were only 1.87 million. Then, the inequality ratio or gini ratio also fell to 0.388 from 0.406 in 2014.
Then, the farmer’s exchange rate increased over the past 10 years, from an index of 102 in 2014 to 112.46. Suharso said that this economic growth was accompanied by a human development index that rose from 68.9 in 2014 to 74.39. During the 10 years of President Joko Widodo’s administration, the average length of schooling has increased and the gross participation rate in higher education has improved. The improvement in the level of public health is indicated by the quality of human resources and massive infrastructure development.
In the human resources sector, there is education reform and transformation of the health system where the Smart Indonesia Program has provided access to education to 20 million students each year. Then, the KIP Kuliah and Bidik Misi programs have provided access to higher education to 1.5 million students. Meanwhile, in the health sector, there is a decrease in infant mortality from 27 to 17 per thousand births, and a decrease in stunting prevalence from 37.2 percent to 21.5 percent. The number of National Health Insurance (JKN) participants has also increased from 133 million to 273 million in 2024, with half of them being recipients of contribution assistance from the Government.
Meanwhile, Bank Indonesia (BI) Governor Perry Warjiyo said that Indonesia was able to maintain controlled inflation amidst the phenomenon of high global interest rates. Going forward, he said that 2024 CPI inflation will remain under control within its target. Core inflation is projected to be maintained along with inflation expectations that are within the target, the capacity of the economy that is still large and can respond to domestic demand, controlled imported inflation in line with BI’s rupiah exchange rate stabilization policy, and the positive impact of developing digitalization. Volatile food inflation is also expected to remain under control supported by the synergy of inflation control between BI and the Central and Regional Governments.
Seeing this phenomenon, Coordinating Minister for Economic Affairs, Airlangga Hartarto said that the World Bank greatly appreciates Indonesia’s stable economic growth of above 5 percent with an inflation rate of 2.58 percent. In addition, the World Bank also appreciates a number of programs that have been carried out by the Indonesian Government in order to maintain national economic stability. Airlangga emphasized that President Jokowi during his term of office has always focused on the village fund program where Rp71 trillion was used for various rural needs and activities including reducing stunting in children.
Various programs, policies, and assistance from the Indonesian Government continue to support all aspects of people’s lives including social life, health, economic activities, and the sustainability of the business world supported by synergy and cooperation of all stakeholders including the community and the private sector. In general, there are six main policies of the National Economic Recovery Program (PEN), namely health care, social protection, incentives for the business world, support for Micro, Small and Medium Enterprises (MSMEs), corporate financing, and sectoral programs of Ministries/Institutions and Regional Governments.
On the other hand, Financial System Stability (SSK) remains well maintained amidst increasing pressure in the global financial market, along with global economic uncertainty and still high global geopolitical risks. The Indonesian banking industry is able to demonstrate resilient performance in the face of various global dynamics and challenges. This is indicated by adequate banking liquidity in the second quarter of 2024, reflected in the ratio of Liquid Assets to Third Party Funds (AL/TPF) which is still recorded at a high 25.36 percent.
As an anticipatory step for various global dynamics, synergy and coordination with other authorities, especially monetary authorities and the financial sector, will continue to be strengthened to maintain national economic stability. That way, the government will continue to monitor and assess the potential impact of global dynamics on the domestic economy and fiscal conditions. The State Budget will continue to be optimized as a shock absorber to maintain people’s purchasing power and economic growth momentum. All parties must remain optimistic that the economy can continue to grow considering the current strong political stability and national security.
)* The author is an Economic Observer at the Nusa Bangsa Institute.
