Indonesia continuously seeks to become a high-income country or a developed country. Various efforts have been made by the government to achieve this goal. Related to this goal, President Jokowi revealed one key for Indonesia to become a developed country.
President Jokowi emphasized that in 2018 Indonesia is still in the lower middle income. Then, until the end of 2018, Indonesia had actually risen to the upper middle-income level, but during the pandemic, Indonesia’s economy fell again to lower middle-income. In 2022, Indonesia will rise again to become an upper middle income.
Therefore, to continue to boost Indonesia to become a developed country, the development of downstream mining must be consistently encouraged because this can increase Indonesia’s GDP.
Jokowi, in his remarks at the 2023 Financial Services Industry Meeting, Monday (6/2/2023), ensured that downstream was the key for Indonesia to leapfrog to become a developed country.
So far, smelter developers are still having a hard time finding funding. Support for development is also really given with great calculation and care.
Furthermore, Jokowi explained that of all the commodities owned by Indonesia; CPO, minerals, and marine resources “only” generate US$ 1.1 billion. This figure can jump up to US$ 30 billion downstream.
According to him, the government has succeeded in downstream Nickel. For this reason, he will continue to ban the export of other commodities, such as bauxite, tin, copper, natural gas, and gold.
On the other hand, the Minister of Finance Sri Mulyani Indrawati explained that there were several challenges that Indonesia had to solve in order to upgrade to become a developed country or a high-income country.
She said the country must work hard to improve various aspects to become a developed country. This step is also necessary so that Indonesia is not trapped as a middle-income country or middle-income trap.
Sri Mulyani said that not many countries in the world have succeeded in becoming developed countries. In this 5-decade period, no more than 20 countries have split from middle-income countries to become high-income countries, including Singapore, Australia, Taiwan, and South Korea.
In the Asian region, many countries are capable of becoming developed countries, while in Latin America, only Chile is successful. So far, no country on the African continent has been able to become a developed country.
According to Sri Mulyani, three challenges must be resolved by a country to become a developed country. These are strengthening human resources (HR), improving infrastructure, and institutional reform.
In recent years, the government has invested large sums in strengthening human resources. For example, the allocation of the education budget is 20% of state spending. The health budget is 5% of state spending and the provision of various social assistance schemes.
Then, the government also allocates spending for infrastructure development in all regions of Indonesia. According to her, infrastructure development is needed to encourage people’s mobility.
Last, the government is also improving bureaucracy and institutions so that Indonesia’s investment climate can more efficient and competitive.