By: Prabowo Subianto [excerpted from “National Transformation Strategy: Towards Golden Indonesia 2045,” pages 151-152, 4th softcover edition]
A Vast Domestic Market
With a population exceeding 270 million and about 20% or roughly 50 million people belonging to the ‘middle class’ (World Bank, 2020), Indonesia presents a vast and appealing market.
Such a large population means nearly every industry could thrive just by catering to the Indonesian market. Take clothing, for example. If 50 million people buy just one pair of pants each year, at a price of Rp. 100,000 per pair, that’s a Rp. 5 trillion business. With a 10% profit margin, that’s Rp. 500 billion in earnings. And that’s just from pants, not to mention other types of clothing.
Indonesia’s domestic market is so significant that numerous foreign companies vie to enter and sell their products here. Even in 2022, with Indonesia’s GDP reaching USD 1.3 billion (about Rp. 19,588 trillion), household consumption accounted for 52% or around Rp. 10,100 trillion. This compares to government consumption contributing only 9% to Indonesia’s GDP, and exports 25%.
This means Indonesia’s economic growth is driven by household consumption. The good news is, there’s huge potential for increasing household consumption. For instance, I’ve noticed our per capita protein and electricity consumption is still far below that of developed countries.
Improving nutrition and quality of life in Indonesia, just with increased protein and electricity, could significantly boost household consumption – and Indonesia’s GDP.
To maximize this opportunity, any increase in protein consumption should come from domestically produced sources. From Indonesian dairy farmers, egg producers, fish cultivators, fishermen, and farmers.
Electricity generation should also, as much as possible, come from renewable sources and use equipment, machinery, and expertise from Indonesia. I’m not against foreign products and services in Indonesia. But we must be competitive. If it’s about selling pants, the government must ensure Indonesians can compete. The market shouldn’t be monopolized by major economic powers.
I believe in the quality of Indonesian products compared to foreign ones. We already have Indonesian-made bicycles, ships, weapons, and even jeeps engineered in Indonesia. Weapons made by PINDAD often excel in international competitions. This is concrete proof of our industrial capabilities that deserve the chance to grow.
