JAKARTA (TheInsiderStories) – The World Bank has raised Indonesia’s status from middle-income to upper-middle-income nations as of July 1, 2020. This was given after the country’s gross national income (GNI) per capita rose to US$4,050 in 2019 from the previous $3,840.
The World Bank classifies countries based on GNI per capita in four categories includes low income ($1,035), lower-middle income ($1,036 – $4,045), upper middle income ($4,046 – $12,535 ) and high income (> $12,535).
The classification is commonly used internally by the World Bank but is also widely referenced by international institutions and organizations. The Wolrd Bank uses the classification as one of the factors to determine a country is eligible to use Bank facilities and products, including loan pricing.
“That’s proof of Indonesia’s economic resilience and sustainable growth that has always been maintained in recent years,” the finance ministry said in an official statement on Wednesday (01/07).
The government will push for a series of structural reform policies focused on economic competitiveness, such as human capital and productivity, the industrial capability to increase exports and reduce the current account deficit, and digital economy to encourage broad economic empowerment, the ministry added.
“It will further strengthen investors’ perceptions, trading partners, bilateral and development partners for Indonesia’s economic security,” it said.
The new status is also a strategic stage towards Advanced Indonesia in 2045, the ministry added. Some policies that improved include strengthening human resources through education, health and social protection, infrastructure, innovation and technology, and business process efficiency.
Indonesia and the World Bank also continue to enhance cooperation through the Country Partnership Strategy framework. To deal with the Covid-19 pandemic, the World Bank has provided financial support of $250 million for Southeast Asia’s biggest economy.
Two months ago, the agency has approved two new projects totaling $700 million to help Indonesia to respond to the pandemic. The financing will help support the country to enhance its social protection system and strengthen the financial sector.
“The government is cognizant of the significant impact of Covid-19 on the livelihood of so many people in different sectors in the regions all over Indonesia. With support from international institutions such as the World Bank, we are able to provide relief for different needs such as the provision of social assistance and maintaining the resilience of the country’s economy,” said minister of finance Sri Mulyani Indrawati.
She continued, the funds will support various sectors to provide the necessary foundation which will enable further government actions to ensure the long-term recovery of the people and the economy. The first project approved is the $400 million Additional Financing for Social Assistance Reform Program.
The initial project approved three years ago has successfully supported the government’s flagship social assistance program—the Family Hope Program—to expand its coverage from six million to 10 million families, and to improve the program’s delivery systems and coordination with other social assistance programs.
Written by Lexy Nantu, Email: firstname.lastname@example.org