National Strategic Challenge: Navigating the Limited Time of the Demographic Dividend

By: Prabowo Subianto [excerpt from “Strategic Transformation of the Nation: Towards a Golden Indonesia 2045”, pp. 53-54, 4th edition]

Alongside global strategic challenges such as climate change, geopolitical conflicts, and the rapid expansion of artificial intelligence, Indonesia is confronted with several pressing national issues.

One significant challenge is the impending closure of our demographic dividend window. Our nation’s wealth continues to flow overseas, resulting in a consistent net outflow of national wealth. Furthermore, our economy is marked by inequality and lacks uniformity. Similarly, our democracy is compromised by excessive financial influence in politics.

Our ability to evolve into a developed and prosperous country hinges on our capacity to manage and surmount both these global strategic and domestic challenges.

The Diminishing Window of the Demographic Dividend

Our population is our asset, especially with a current median age of 29 years, which signifies that the majority of Indonesians are in their most productive years, ideal for learning and working efficiently.

However, this median age indicator of a youthful, productive populace will not persist indefinitely. With the rate of population growth decelerating, the proportion of young Indonesians will inevitably decline. According to projections by the National Development Planning Agency (Bappenas), by around 2035—merely 13 years from now—the median age will shift upwards.

Historically, it has been challenging for nations to achieve wealth and prosperity when their population ages beyond its productive prime. Currently positioned as a middle-income nation, our goal is to ascend to high-income status.

To reach this high level of welfare, our GDP per capita must climb to $14,000, or about IDR 210 million per year, which translates to a monthly income of approximately IDR 17.5 million for each resident.

We have just 13 years to escape the middle-income trap and avoid the fate of becoming an old nation before becoming wealthy, as has happened in Thailand. Thailand has become an aged society without first achieving wealth. We must avoid this by ensuring rapid economic growth so that we can become prosperous before our demographic profile ages significantly.