By : Azahrin )*
National economic resilience has become a priority for governments in various parts of the world, especially in facing increasingly complex global challenges like the ones we are currently experiencing. In the midst of geopolitical dynamics, climate change and changes in the global economic paradigm, the sustainability and resilience of a country’s economy is the key to facing all challenges.
The government has a central role in ensuring national economic resilience is realized. Through appropriate strategic policies, the government can create a stable, inclusive and sustainable economic environment. As well as formulating strategic policies that are able to build a solid and sustainable economic foundation. This article will discuss various steps and strategies that can be supported to realize national economic resilience.
Indonesia’s economic recovery will continue in 2023, amidst slowing/decreasing world economic growth and high financial market uncertainty. Indonesia’s economic growth in 2023 will actually remain high in the range of 4.5-5.3 percent, supported by strong domestic demand.
The government is moving quickly to prepare various scenarios to anticipate the impact of the current world geopolitical turmoil. Apart from that, national economic fundamentals are also strong, which can be seen from the good prospects for Consumer Confidence which is at a positive level, namely 123.8, retail sales which are growing three and a half percent year on year, and the manufacturing sector which is relatively high compared to various other countries, namely PMI 54 ,2. Meanwhile, Indonesia’s inflation is also relatively controlled in the range of 2.5 ± 1%.
Coordinating Minister for Economic Affairs Airlangga Hartarto said that in the current geopolitical turmoil, world leaders are also relatively avoiding escalation and potential disruptions related to logistics, supply chains and interests in the Strait of Hormuz.
Rating agency Moody’s assesses that Indonesia’s economic resilience remains maintained with high and stable growth and various strong policy instruments amidst global economic uncertainty.
Economic stability is also maintained, both external and internal stability. Indonesia’s balance of payments remains good, supported by healthy current account performance, amidst pressure on the capital and financial balance due to high global uncertainty.
This positive domestic economic performance was achieved amidst increasing world economic turmoil and full of challenges. Various developments show 5 (five) characteristics that will color the performance and prospects of the global economy in 2023. First, weak economic growth accompanied by divergence. Second, the decline in inflation is slow. Third, interest rates are high for a long time. Fourth, capital flows out of Emerging Market and Developing Economies (EMDEs) countries. Fifth, the US dollar exchange rate remains strong.
These global developments are putting pressure on the economies of developing countries, so it is necessary to strengthen policy responses to mitigate the negative impact of global spillovers on domestic economic resilience.
In encouraging economic resilience and revival, the Government has provided various economic policy strategies. Secretary of the Coordinating Ministry for Economic Affairs, Suswijono Moegiarso, said that there were several policies implemented by the Government to encourage increased exports, including the formation of a National Export Increase Task Force, opening opportunities for new markets such as non-traditional markets, and strengthening trade cooperation.
A country’s economic competitiveness is a determining factor in attracting investment and increasing exports. The government must strive to increase competitiveness through regulatory reform, improving the investment climate, improving infrastructure quality, and building human resource capacity. Partnerships between government, the private sector and academic institutions are also important in creating a business ecosystem that is conducive to economic growth.
Apart from that, international cooperation is one of the keys to building national economic resilience. The government needs to strengthen diplomatic and economic relations with other countries, either through trade agreements, direct investment, or cooperation in developing infrastructure and technology. Strong partnerships will help open new markets, increase access to technology and resources, and reduce dependence on a single market.
Deputy Chairman of the Indonesian People’s Consultative Assembly Lestari Moerdijat (Rerie) said that tensions in Russia-Ukraine and Israel-Palestine do have the potential to impact Indonesia. The ongoing impacts of the global crisis and climate change need to be taken seriously. Therefore, anticipatory efforts are needed through policies that support domestic economic resilience.
National economic resilience is not a goal that can be achieved instantly, but is the result of hard work and continuous and well-planned efforts. The government has a major role in encouraging inclusive, sustainable and highly competitive economic growth. Through comprehensive strategic policies and cross-sector and cross-country collaboration, a country can build a strong and resilient economic foundation in facing complex global challenges.
Indonesia’s economic growth in 2024 is predicted to be in the range of 4.7-5.5 percent and will continue to increase in the medium term. Inflation is predicted to remain under control at the target range of 2.5 percent in 2024.
The current account deficit will be maintained low and healthy in the range of a deficit of 0.1 percent to a deficit of 0.9 percent of GDP in 2024. Likewise, credit/financing growth by banks to the business world is also predicted to increase to 10-12 percent in 2024.
)* Unair Student, Faculty of Economics and Business