JAKARTA (TheInsiderStories) – President Joko Widodo has called on business players to seize promising business opportunities as Indonesia’s economic growth is expected to improve to 5.3-5.4 per cent next year, from around 5.1 per cent this year.
The President sees potential factors that could lift Indonesia’s economy next year, including anticipated higher spending in regional areas, triggered by regional elections, as well as better-than-expected results in certain sectors, including tourism, lifestyle and information technology.
Next year, Indonesia will hold 171 regional elections – 17 to elect governors, 115 to elect Regency Heads and 39 to elect Municipality Heads.
“I think our economic growth next year will be around 5.3-5.4 per cent. Regional economies are likely to become the motor of the national economy next year,” President Joko Widodo said at a CEO Forum held in Jakarta on Wednesday.
He mentioned that in addition to regional elections, the growth of the tourism industry and lifestyles, coupled with the development of infrastructure projects by the government across the nation, would help lift regional economies and ultimately boost the national economy.
He pointed to the Palapa Ring fiber optic program being developed in central and eastern Indonesia as helping to open up business opportunities in the central and eastern part of this archipelago.
The government is currently embarking on the Rp 14 trillion Palapa Ring project, comprising three sections – west, central and east – that will span around 13,000 km. The project aims to expand domestic broadband service nationwide, particularly in frontier, outermost and remote regions.
‘The fiber optic program, as targeted by Palapa Ring, is important in opening up business opportunities in the regions, in particular for digital-based businesses,’ the President said.
According to the President, digitalization of the economy will change consumption patterns from spending in traditional outlets to online, as well as affecting entertainment. In addition, the way people work will also change.
“The third phenomenon is globalization, where hundred millions of people across the globe upgrade to middle class,” he added.
The global economy, along with Indonesia’s, stalled until 2015, but began to recover from 2016. In 2017, the President said, the government managed to push economic growth higher. “The global economy weakened significantly in that period, but our economy only slowed down to around 5 per cent. Our economy is marching to a different tune,” he said.
President Joko Widodo’s projection is at the upper end of Bank Indonesia’s. Last night, at the bankers’ dinner, Bank Indonesia Governor Agus Martowardojo said the central bank expects the national economy to grow within a range of 5.1-5.5 per cent next year.
President Widodo said at the bankers’ dinner that it is important for policymakers to take advantage of such ‘positive momentum’.
One positive trend is the improved rating of the country’s economy, an upgrading of the ‘Ease of Doing Business’ (EoDB) ranking issued by the World Bank, whereby Indonesia moved to 72nd place from 106th, as well as the birth of new growth engines (such as an expansion of tourism) as reflected by the rise of tourist arrivals in the country.
“This should inspire optimism throughout the business community in Indonesia,” he said. However, the government does not intend to be complacent. The government, he said, will continue to carry on with structural reforms as well as other steps, such as issuing more appropriate and relevant laws and regulations. (*)