Increasing Indonesia’s Economic Competitiveness in the Global Arena in the Era of President Jokowi’s Leadership
By: Nana Gunawan )*
Towards the end of President Joko Widodo’s (Jokowi) term, the Government continues to strengthen its commitment to maintaining national economic stability amidst global challenges. Various economic indicators show that the strategic steps that have been taken have succeeded in providing a strong foundation for the national economy. One indicator that reflects this economic stability is the performance of Indonesia’s Balance of Payments (NPI).
In the second quarter of 2024, the NPI showed significant improvement, from a deficit of USD6 billion in the first quarter of 2024, to a lower deficit of USD0.6 billion. The Government will continue to strengthen sectors with high added value and are not dependent on fluctuations in global commodity prices.
Deputy for Macroeconomic and Financial Coordination of the Coordinating Ministry for Economic Affairs, Ferry Irawan, said that the high-tech manufacturing industry sector such as the automotive industry, electronics, and industrial downstreaming are examples of high value-added sectors.
For several of these sectors, the Government has issued various regulations to regulate the provision of fiscal incentives, prohibitions on the export of raw materials, development of research and innovation centers, and utilization of various international cooperation. This effort will not only strengthen Indonesia’s competitiveness in the global arena, but will also keep the national economy more resilient to external shocks.
Furthermore, the improvement in the NPI was also driven by a surplus in capital and financial transactions that was able to offset the current account deficit. Capital and financial transactions that recorded a surplus of USD2.7 billion in the second quarter of 2024 reflect foreign investor confidence in the financial market and domestic real sector.
Seeing this, the Government will continue to strengthen the investment climate through various regulatory reforms and sustainable infrastructure development. The important role of the Indonesia Investment Authority (INA) as a Sovereign Wealth Fund (SWF) continues to be driven to help strengthen quality capital inflows, especially in important sectors such as infrastructure, energy, and technology.
Ferry also explained the importance of economic transformation to increase competitiveness. According to him, government policies under President Jokowi have succeeded in increasing Indonesia’s economic competitiveness in the global arena. Another indicator can be seen from the significant improvement in the IMD Global Competitiveness Index. Investors are very confident in the prospects for Indonesia’s economic growth, especially in terms of growth, external resilience, and credible fiscal policies. The government will also continue to strive to maintain economic competitiveness through various policies.
Meanwhile, Minister of Investment/Head of the Investment Coordinating Board (BKPM), Rosan Perkasa Roeslani said that collaboration is the key to facing global threats during the era of President Jokowi’s leadership. Uncertainty is the biggest risk to global geopolitical stability, so the solution is collaboration from various parties to maintain this stability.
In order to realize the vision of Golden Indonesia 2045, economic transformation is one of the steps taken by the Government to increase inclusive and sustainable national economic growth. The economic transformation carried out by the Government covers various sectors, one of which is the integration of the global and domestic economy.
Considering this, the Government is trying to strengthen international cooperation which is considered important in providing a comprehensive roadmap to encourage this economic transformation. In addition, the Government is also trying to encourage investment attractiveness by increasing investor confidence by forming global norms through discussions on economic policies, implementing high standards related to Governance, and expanding global coverage.
The Government has also made several efforts to encourage inclusive economic growth by intensifying industrialization in several sectors, from downstreaming Natural Resources (SDA) to digital, developing the petrochemical industry with a target of 30 million tons for olefins and 5.6 million tons for aromatics in 2035, strengthening the automotive industry, developing the semiconductor supply chain, to improving the logistics ecosystem to reduce logistics costs by eight percent in 2045. In addition, Indonesia has played a role in creating regional stability in the Indo-Pacific which plays an important role in the availability of commodities in countries in Southeast Asia and the South Pacific.
Coordinating Minister for Economic Affairs, Airlangga Hartarto said that if Indonesia wants to increase its economic competitiveness in the eyes of the world, it must have strong and inclusive growth. Indonesia is considered to be integrated into the regional and global supply chain. Therefore, security and stability are important so that Indonesia’s supply chain is not disrupted.
Airlangga also said that currently the Government is pushing for the acceleration of the One Map policy accompanied by the development of National Strategic Projects (PSN) and the development of Special Economic Zones (KEK) as one of the concrete efforts in achieving the target of the National Long-Term Development Plan (RPJPN) 2025-2045.
Economic growth towards Indonesia Emas 2045 is the result of a combination of appropriate policies and strong support from a number of parties who continue to work together to help the Government encourage national economic growth. This is evidenced by the increasing competitiveness of Indonesia in the international arena, because it is considered good at controlling the economy and increasing growth. Including the influence of the contribution of businesses and businesses in Indonesia which are increasingly competitive. This achievement is not easy in the midst of an uncertain global economic situation, so inclusive and sustainable policies must be the main focus so that all levels of society can feel the benefits of the economic growth that continues to increase.
)* The author is an Economic Observer at the Nusa Bangsa Institute.
