The Indonesian Economy Can Grow at 7-8 %

In the National Medium Term Development Plan for 2015 to 2019, the government has been targeting economic growth in Indonesia at 7-8% in 2019.

Will economic growth in Indonesia achieve at 7-8% in 2019? Let’s predict it!

To encourage economic growth in Indonesia at 7-8% is not an impossible thing, but it is not as easy as talking. Therefore, the government as leader of the nation should have been setting "brilliant" strategy to achieve the economic growth target.

Vice Chairman of Committee on National Economy & Industry (Komite Ekonomi & Industri Nasional/KEIN), Arif Budimanta, said there are three main priorities that can be executed by the government to encourage economic growth in accordance with the target at 7-8%. First, Investment must be increased by 10% per year. Second, the government must be encouraged exports to grow at 3% per year. Third, the government must be able to control imports.

To achieve the target is not easy because there are many challenges and obstacles, both internal and external that can make the economic growth at 7-8% only wishful thinking. KEIN also said Indonesia will be facing the external challenges such as a decline in oil and commodity prices that hampered Indonesia’s economic growth in 2015 especially.

Not only that but also KEIN stated the internal challenges of Indonesia are also important, such as:

First, Structure of Indonesian economy is quite vulnerable because is still 56.86% supported by domestic consumption. Second, The national export performance has not been too strong although recent months have shown improvement. Third, Limitation of fiscal space which makes the government's step faltered. For the last, Productivity & competitiveness of Indonesia is also low compared to neighboring countries so that to make investors prefer to invest in other countries.

In addition, perhaps the government can encourage investment in the manufacturing sector especially because it is not without reason, as evidenced in the 1990s the manufacturing sector was able to contribute 30% to GDP and at the time, economic growth reached 7-8%. Therefore, it is better if government embraces and collaborates with industry stakeholders so that the manufacturing sector can make a significant contribution to GDP. With a note without ignoring other sectors, because if all sectors can be optimized, of course, it will be "perfect", right?

So, Is the economic growth target of 7-8% in 2019 realistic? or only wishful thinking?

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