Government Can Expedite Over 5% Economic Growth With Indonesia’s Manufacturing Industry
Indonesia’s manufacturing industry has the capacity for higher economic growth with suitable policies and strategies in place.
The Republic of Indonesia has the capacity and capability to increase its economic growth by more than 5%. According to the Centre of Reform on Economics (CORE), the most productive way to do so is via Government initiatives. With the swift rollout of Government strategies and policies, Indonesia’s manufacturing industry can provide a significant boost to the economy. However, fundamental Government-initiated reforms and initiatives will need to be in place.
According to the World Bank Country Classifications by Income Level 2021-2022 report, Indonesia now occupies a lower-middle-income country category. Indonesia’s per capita income saw a drop to US$3,870 in 2020 from US$4,050 in 2019 due to the global pandemic. While economic growth appears to be slowing, youth unemployment, on the other hand, is on the rise.
CORE economists are urging the Government to focus on implementing strategies and policies that prioritize the growth of manufacturing industry performance. Such strategies are essential towards the higher realization of economic growth percentages. It has the potential to reinstate Indonesia to pre-pandemic levels of productivity and economic growth. This, in turn, can facilitate higher economic growth and jumpstart its idling economy.
Government Strategies and Policies
The economists at CORE are imploring the Government to usher in and encourage an upward trend in the manufacturing sector. They recommend implementing strategies and policies that will support and enhance the industry’s potential for growth. Proposals include overall structural reforms, integrated fiscal policies, and industrial policies, as well as comprehensive investment and financial assistance.
Advocating long-term sector strategies, CORE economists are also urging broad-spectrum improvement across the industry. With the World Bank report in mind, the call is for utilizing Indonesia’s demographic bonus towards boosting economic growth. Job creation and overall improvement of human resources are areas that require crucial and better long-term strategies.
Indonesia’s economy and population are currently the largest in Southeast Asia. It also has one of the youngest population demographics of the region. By capitalizing on its vast human resource asset, Indonesia has the potential to impact positively on economic growth. Long-term reforms and strategies will accelerate expansion and help Indonesia realize its potential of achieving more than 5% economic growth.
Manufacturing a Better Future
Indonesia’s manufacturing industry is ready for tremendous expansion, and entrepreneurs will do well to take note of it. By implementing beneficial strategies and policies, the pace of economic growth will see a sustainable growth curve. It will also safeguard Indonesia’s position as a high-income nation with an upper-middle-income population.
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