Indonesia’s minister touts robust post-Covid-19 economic recovery with consistent 5% growth

INDONESIA – Indonesia’s Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, has expressed confidence in Indonesia’s post-Covid-19 economic recovery during the UAE-Indonesia Economic Business Forum 2023 held at the Raffles Hotel in Jakarta on Thursday (21 Sep).

Speaking in front of UAE government officials and business leaders, including the UAE Minister of Energy and Infrastructure, Suhail Al Mazrouei, Luhut emphasized that Indonesia’s economy is on a robust trajectory compared to many other nations.

“Indonesian citizens should realize that our economy is performing quite well,” he stated.

Luhut: Indonesia’s current economic growth surpasses most countries in the region

Luhut pointed out that Indonesia’s current economic growth has consistently exceeded 5 per cent.

In the second quarter of 2023, Indonesia’s economy recorded a growth rate of 5.17 per cent, surpassing that of most countries and regions, such as Vietnam at 4.1 per cent, the United States at 2.6 per cent, and the European Union at 0.6 per cent.

Additionally, Indonesia has managed to keep inflation in check at around 3 per cent, with August 2023 inflation standing at 3.27 per cent. The government aims to maintain annual inflation at approximately 3.6 per cent.

The government’s debt-to-gross domestic product (GDP) ratio, which reached 40 per cent during the pandemic, has now fallen to 38 per cent, comfortably below the legal limit of 60 per cent of GDP.

Luhut further highlighted that Indonesia’s stock index and exchange rate have remained stable and healthy.

Minister Luhut urges Indonesians to acknowledge pandemic recovery success

He even went on to assert, “Compared to G20 member countries, I believe we rank second best in terms of our economic profile.”

However, Luhut acknowledged that despite the positive macroeconomic indicators, there has been some criticism of Indonesia’s economic performance from within the country itself.

He noted that many citizens are unaware that Indonesia is one of the few countries to have successfully rebounded from the pandemic, saying, “Some Indonesian citizens do not realize that we have been doing well, and they attempt to criticize here and there.”

Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, during the UAE-Indonesia Economic Business Forum 2023 at the Raffles Hotel in Jakarta. (Photo: Liputan6.com)

Addressing these criticisms, Luhut stated that while Indonesia is not a perfect nation, its positive macroeconomic performance signifies that it is moving in the right direction.

“Indeed, we are not a perfect country, but we are heading in the right direction. And in my opinion, our performance is much better than many countries globally,” he added.

Luhut outlined several key agendas to further boost Indonesia’s economic growth, including a focus on downstream industries, digitalization, interconnected economic distribution, rural funding, educational sector development, and decarbonization.

During the event, Luhut also announced the formation of a task force to expedite investment partnerships between Indonesia and the United Arab Emirates (UAE).

“From this morning’s breakfast meeting with Minister of Defense Prabowo Subianto, UAE Minister of Energy and Infrastructure Suhail Al Mazrouei, and Ambassador Abdullah Salem Aldhaheri, we have established a task force to accelerate cooperation between Indonesia and the UAE in various fields,” he explained.

“We have given them 10 days to discuss eight potential areas.”

These areas of cooperation include refinery construction, renewable energy development, the development of the Nusantara National Strategic Area (IKN Nusantara), MRO (Maintenance, Repair, and Operations) for ports and aircraft, national defense and satellite projects, mangrove development programs, downstream projects, and food and energy security.

With Indonesia’s positive economic performance and significant investment opportunities, Luhut encouraged UAE investors to consider Indonesia as a destination for their investments, highlighting opportunities in areas such as IKN (Ibu Kota Nusantara – the new capital city of Indonesia — development, renewable energy projects, and port and airport projects.