By: Prabowo Subianto [excerpted from “National Transformation Strategy: Towards Golden Indonesia 2045,” pages 131-133, 4th softcover edition]
Since 2014, President Joko Widodo and his administration have implemented various programs that have established a very strong economic and social foundation.
His achievements continue and strengthen the development initiated by our country’s leaders starting from President Sukarno, President Suharto, President Habibie, President Abdurrahman Wahid, President Megawati, and President Susilo Bambang Yudhoyono.
To devise appropriate future programs, we must fully understand what has been achieved, so we can continue the good programs and develop those that need improvement.
Economic Achievements
Indonesia has achieved so much in the last 20 years. For example, in terms of economic achievement, during President Susilo Bambang Yudhoyono’s era, Indonesia’s GDP per capita increased nearly 4x from $1,000 to $3,700.
In President SBY’s era, the debt-to-GDP ratio decreased from over 50% to under 30%. This ratio was quite high because our country had to incur significant debt to overcome the 1998 monetary crisis. Also, during President SBY’s era, we fully repaid our debt to the IMF.
Despite the tsunami disaster and the 2008 economic crisis, Indonesia’s economy grew at an average of 5% during President SBY’s era. Indonesia’s economy entered the top 20 globally and became a member of the G20.
The economic achievements of President SBY’s era were continued and strengthened during President Jokowi’s era. In 2022, our nominal GDP or economic size reached US$ 1.4 trillion, equivalent to Rp. 21,000 trillion – the highest figure in history. Indonesia’s economy became the 16th largest in the world.
The GNI per capita also increased to US$ 4,580 or equivalent to Rp. 68.7 million – the highest in history. The poverty rate dropped to 9.57% – the lowest in history.
As I explained in previous chapters, trade for a country is like blood. If the trade balance is continuously negative, then eventually the country’s “blood” will run out. Therefore, the trade balance must be positive. In 2014, when President Jokowi first took office, our trade balance was negative. With the right economic policies, during President Jokowi’s tenure, the trade balance began to show a surplus. Even in 2022, our trade balance achieved a surplus of $54.4 billion, equivalent to Rp. 816 trillion – the largest in our history.
With our positive trade balance, our foreign exchange reserves also strengthened. In 2022, our foreign exchange reserves reached $137 billion, equivalent to Rp. 2,055 trillion. These reserves are sufficient to finance imports for 6 months. With substantial foreign exchange reserves, we can also maintain the stability of our Rupiah’s exchange rate.
Economic growth during President Jokowi’s era has been good and stable at 5%. Currently, our economic growth is the second fastest among the G20 countries after China.
Our inflation rate is also maintained at 3.3%. This rate is important because high economic growth means nothing if inflation is higher. Currently, our inflation is one of the lowest among the G20 countries. With good economic management and appropriate policies, we can avoid excessive inflation like what is currently happening in Argentina and Turkey, with inflation rates in the tens of percent.
Economic growth requires working capital and investment. One source of investment is the Government. Although there has been a budget deficit during President Jokowi’s era and the government had to incur debt, our current debt-to-GDP ratio at 38% is one of the lowest in the G20.
