Significant economic growth predicted for Indonesia

Indonesia is set to experience significant economic growth by focusing on digitalisation and reducing non-essential spending, according to President-elect and Defence Minister General Prabowo Subianto. Speaking at the Qatar Economic Forum 2024 on Wednesday, Subianto outlined his administration’s strategy for achieving this growth, saying: "That means refocusing and cutting down the wastes ... It is a matter of efficient, good governance, good administration, good management, and we are in the midst of introducing e-governance.He highlighted the government’s plans to computerise the procurement processes of all Indonesian government institutions, aiming to enhance revenue services and reduce waste. "We calculate that we can save a lot of money by cutting down waste, and this will be the growth driver, so we are very confident,” he added as he expressed optimism that achieving 8% growth within 2-3 years is feasible, while maintaining a budget deficit of 3%."We studied all the figures and we are confident we can do that ... the 3% (budget deficit) is something arbitrary. Not many countries adhere to it, but we have a tradition of prudent fiscal management. I think we have one of the lowest debt-to-GDP ratios in the world. So now it is time to be a bit more daring within good governance.”About other growth drivers, Subianto identified agriculture, food production, food distribution, and energy as primary focuses."The growth driver in the first years will be our concentration on agriculture, food production, food distribution, and energy. We want to go green quickly and produce our diesel from palm oil, which will be a very strong growth driver. We import $20bn every year for diesel oil, so imagine the savings when we switch to biofuel,” he pointed out.Addressing concerns about protectionist policies, Subianto clarified: "No, no, I think it is a misconception. We are not protectionist. What we are doing is very logical. Every country in the world will protect the national core interests of their people. We want to industrialise and utilise our natural resources fully. We cannot keep importing industrial goods all the time; it is not fair to our people. We will not be an advanced industrial society if we are just producers of raw materials.”Regarding the planned capital relocation from Jakarta, Subianto explained the $35bn project, saying: "First, the idea was to place the capital in a more central location. Secondly, Jakarta and its surroundings in Java are very highly populated, creating a tremendous ecological burden."We are facing a sea-level rise of about 5 to 10cm a year, so we have to build a giant sea wall. Moving the capital will help spread growth beyond Jakarta and Java and protect the capital from inundation until the sea wall is completed, which will take 10-15 years.”Subianto noted that the construction would take 25 to 30 years, and would rely on national resources initially. "The Indonesian economy can bear the costs of that,” he said, expressing confidence in the country's financial capability to support this monumental project.