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The Government is Committed to Realizing Indonesia’s Economic Transformation

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By: Farah Adiba )*

The government is committed to realizing the transformation of the Indonesian economy. This leap is needed to revive the national economy as well as to prevent dependence on foreigners.

President of the Republic of Indonesia Ir. Joko Widodo (Jokowi) said the government would begin the transformation of the Indonesian economy. For this reason, the government needs to take a leap in order to realize the economic transformation. This was conveyed by President Jokowi during a groundbreaking ceremony at the Green Industrial Estate in Bulungan Regency, North Kalimantan.

The economic transformation carried out is by no longer exporting raw materials, but starting to export semi-finished or finished materials. Jokowi said, from what we have for years relied on natural resources, exports of raw materials, exports of raw materials, now we will go into downstreaming, to industrialize our raw materials.

What is exported is no longer raw materials, but semi-finished goods or finished goods and in North Kalimantan, almost all of them are finished goods.

By exporting semi-finished and finished materials, it will provide great added value to the Indonesian state. According to him, starting to change the export of raw materials into semi-finished and finished materials is a frog leap, so that it will provide great added value for the country because we sell them already in the form of finished goods.

Jokowi believes that this frog leap can see real benefits within the next 5 to 10 years. Therefore, the President hopes that the Indonesian Green Industrial Estate, which has just been groundbreaking, can become the largest green industrial area, not only in Indonesia, but in the world. It can be seen from the area of ​​land that has just been built as much as 16,400 hectares of the target of 30,000 hectares.

Of course, we hope that in the future there will be no more news stating that Indonesia exports raw materials at low prices, then imports them again in the form of finished goods at very high prices.

Many developed countries are happy to import raw materials in Indonesia at cheap prices, then process them into finished materials and then resell them to Indonesia at a price tens of times the price when they were raw materials.

Of course this is irony. Because Indonesia is a country that is rich in mining materials and should be able to process them for materials to make various industrial products that have many benefits such as electronic products, agricultural tools, vehicles, etc. and has a higher selling price.

Many developed and rich industrialized countries do not have raw materials, but are able to process raw materials into finished materials and sell them at many times the price. Call it like Japan, Germany, England and Singapore which are examples of countries that are able to process raw materials into high-tech finished materials that have a fairly high selling value.

This transformation can of course be a strategy for Indonesia to improve the economy in Indonesia. Of course changing the scheme of selling semi-finished goods requires a longer process than selling raw materials. However, the manufacturing process will have a positive impact, one of which is the absorbed workforce and increased selling value.

So it is not impossible if the people’s welfare targets include inflation targets, economic growth, job creation, poverty reduction, increasing the human quality index and inequality.

Absorption of labor is of course very necessary, especially during the Covid-19 pandemic, many people have been forced to be laid off from their jobs. So that the absorption of labor is one indicator of the government’s success in realizing Indonesia’s economic transformation.

If the unemployment rate can be suppressed, Indonesia can spur faster economic growth, thus enabling Indonesia to get out of the middle income trap.

The government’s commitment to realizing the transformation of the Indonesian economy certainly deserves to be guarded and appreciated. In the midst of a completely unstable economy, transformation is something that is mandatory, so that later Indonesia will become a nation that is not only rich but also prosperous.

)* The author is a student of Pakuan University, Bogor

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