For a long time, Western countries have dominated the global economy. However, amid the global recession and geopolitical conflicts, there may be a shift in power towards Asia. President Joko Widodo (Jokowi) stated that a transition towards the “Asian Century” is already happening, with three new economic superpowers emerging from Asia that will shape the global economy. According to Jokowi, Indonesia will be one of those powers.
“We have entered the Asian Century, with a shift of power from the West to Asia. Economic growth is moving to this region, and it is predicted that there will be three new economic superpowers—India, China, and Indonesia,” Jokowi stated at an investor event held at the Jakarta Convention Center on Tuesday (8/10/2024).
Despite this promising future, Jokowi acknowledged that Indonesia must overcome numerous challenges to solidify its place as a global superpower. He stressed the importance of not being swept up in pessimism, especially amid the uncertainties the country faces. “It’s essential to keep optimism alive,” he urged.
Among the main challenges, Jokowi pointed to the global economic slowdown, which is expected to grow only between 2.7% and 2.8%. In contrast, Indonesia’s economy continues to perform better. “We should be grateful that Indonesia’s growth is still above 5%,” Jokowi said.
Adding to these difficulties are escalating geopolitical tensions, particularly conflicts involving Ukraine and Israel, as well as Israel’s clashes with Palestine, Lebanon, and Iran. These tensions, according to Jokowi, have only deepened the already existing global economic uncertainty.
“Global economic uncertainty is becoming more unpredictable. That’s why I emphasize that we should remain optimistic and avoid falling into pessimism due to global uncertainties and other issues,” he remarked.
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In addition to navigating geopolitical tensions, Indonesia must also address domestic challenges like climate change and productivity concerns. Still, Jokowi remains hopeful, citing strong economic fundamentals as a reason for optimism. Indonesia’s growth remains steady above 5%, while inflation is kept in check at 2.8%.
“Our consumer confidence index hit an optimistic 124.4 this morning. The trend in our spending index is also on the rise,” Jokowi shared.
However, the journey to becoming a global superpower is anything but easy. Indonesia continues to face significant hurdles, including the decline of its middle class. According to the Central Statistics Agency (BPS), 9.48 million Indonesians who were once part of the middle class have fallen into lower income categories over the past five years.
While the government attributes much of this decline to the COVID-19 pandemic, economists argue that the problem runs deeper. Indonesia’s ability to tackle these issues will be crucial as it strives to cement its position as one of the world’s top economic powers.