Jokowi wants to ensure sustainable development
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Jokowi ingin pastikan pembangunan berkelanjutan
30 May 2023
By: Hari Gunarto and Nasori
Jakarta - President Joko Widodo wants to ensure sustainable development programmes. Hence, he hopes that the future national leader can oversee and continue several strategic policies, namely Nusantara Capital City (IKN) development, the downstreaming programme, clean energy transition, and other vital projects.
The President reminded that Indonesia only has 13 years to position itself as an advanced country. Currently, Indonesia is still in the upper-middle income category. Meanwhile, to be an advanced country, Indonesia’s per capita income needs to reach around US$10,000 per year. “We are currently in the middle income [category], even though we are in the upper level. To get out of the middle income category to be an advanced country, the per capita income needs to reach at least US$10 thousand per year,” Jokowi affirmed when he met the leaders of national media at the State Palace on Monday (29/5/2023).
Indonesia is in an upper-middle income country with a gross domestic product (GDP) per capita of US$4,783.9 or Rp71 million at the end of 2022, which increased by 10% from the previous year. Meanwhile, the GDP at basic prices reaches Rp19,588.4 trillion or US$1.3 trillion.
According to President Jokowi, downstreaming and industrialisation are routes that Indonesia must take to be an advanced country. By transforming primary products into semi-finished goods and finished goods, the added value obtained can reach US$715 billion or Rp10,754 trillion. Downstreaming also opens job opportunities for 9.6 million people.
One of Indonesia’s products that can be downstreamed is electric vehicle battery raw materials. As much as 93% of this country’s natural resources are electric vehicle battery raw materials, such as nickel, manganese, and cobalt. The President mentioned that the added value of nickel downstreaming surged to US$30 billion from US$1.1 billion.
Mining products are not the only ones that have high added value, but also maritime resources. The President illustrated that shrimp shells could be processed into chitosan to increase the value by 27 times. Crabs can also be processed into crabmeat that increases the value by 3.2 times.
Regarding the capital city relocation from Jakarta to North Penajam Paser in East Kalimantan, the President affirmed that the strategy was more than relocating the Presidential Palace, but it was also an effort to build a new culture, a new work culture, and a new economic mindset. By relocating the capital city to outside of Java, the government is realising the Indonesia-centric concept, not Java-centric. The capital city relocation to outside of Java is a real step to realise social equity and justice. With a forest area that reaches 70%, Nusantara Capital City (IKN) will be a future smart city. A city that is based on forests and nature has yet to exist. All systems will be digitalised and 80% of the mass transportation will be unmanned. IKN will be a green, digital, modern, and future city. IKN is a showcase of Indonesia’s transformation and cultural shift.
As of 10 April 2023, there are 182 investors from 16 countries that have submitted a letter of intent (LoI) to invest in IKN. Around 50% are from Indonesia, while the rest are from Singapore, Malaysia, the United State of America, France, and China.
Besides downstreaming and IKN development, Jokowi’s success milestone includes infrastructure development. During his term of office, the government has built 1,677 kilometres of toll roads, 4,600 km of non-toll roads, 124 new ports, 16 airports, 29 dams, and more than 12 thousand kilometres of fibre optic network called Palapa Ring.
Intervene
Regarding his intention to intervene in the 2024 elections, President Jokowi stated that he would intervene in a positive way to ensure the future of the nation and the country. His intervention will be carried out in accordance with the laws and will not stain the democracy.
“I will not break the rules, violate the law, and stain the democracy,” Jokowi said
The central government further explained the context of Jokowi’s statement regarding his intervention in the elections. Jokowi has an interest and wants to ensure that the 2024 elections will be carried out excellently to not cause a polarisation. The 2024 elections are expected to be carried out democratically, honestly, and fairly. Besides that, Jokowi hopes that participants in the elections will compete fairly.
Hence, Jokowi is asking Indonesian National Armed Forces (TNI)-Indonesian National Police (Polri) and State Civil Apparatus (ASN) to remain neutral. Jokowi will respect and accept the people’s choice. Jokowi will also support the transition of the national leadership as best as possible.
Jokowi also wants the chosen president to observe and continue several strategic policies, such as IKN development and downstreaming.
Acting Deputy for Macro-economic and Financial Coordination of the Coordinating Ministry for Economic Affairs Ferry Irawan said that the middle-income trap needed to be handled with a high level of economic growth that reached around 6%-7% through high productivity of capital factors, namely innovation and efficiency. “Some of them are the downstreaming of natural resources and the transformation of industrial sectors, which include the tourism sector,” Ferry revealed when he was contacted by Investor Daily recently.
Besides that, efforts to control inflation is required by using fiscal and non-fiscal instruments, eliminating extreme poverty, reducing the stunting prevalence, increasing investments, and accelerating infrastructure development. “As well as strengthening the priority budget to support economic transformation. Structural reformation is the key to a successful sustainable economic transformation,” Ferry said.
On a separate occasion, Institute for Development of Economics and Finance (Indef) Executive Director Tahid Ahmad suggested, to be free of the middle-income trap, the government needed to transform the economy by making strategic industries, such as petrochemical, iron, and steel industries, the mother of industry. “The government also needs to recover the competitiveness of the textile and the footwear industries that have high workforce absorption. Then, they can focus on industries that are based on natural resources, such as CPO (crude palm oil), nickel, and others,” he stated.
Next Article: Construction SOEs: WIKA increases new contracts
