Indonesia hopes to have become the fourth world economic power by the time it celebrates the 100th anniversary of its independence in 2045.
The goal, as optimistically outlined by President Joko Widodo, is to consolidate growing interest in the country’s economic potential.
According to experts the country could very well achieve such a feat given that, since gaining independence from the Netherlands in 1945, Indonesia has charted a path which has seen it become the largest economy in Southeast Asia and one of the most important on the continent as a whole.
Categorized as an emerging and developing nation, the country’s future is being designed around the solid bases it has managed to forge over recent years such as sustained growth, manageable rates of inflation and a reduction in its foreign debt.
However, Indonesia’s goal of becoming the world’s fourth economic power is still striking, with many wondering how this archipelago, made up of more than 17,000 islands and with the largest Muslim population on Earth, will be able to achieve such an important position and at the same time overcome difficult challenges such as poverty reduction, inequality, bureaucracy, corruption and economic diversification.
According to studies conducted by the Coordinating Ministry for Economic Affairs and the Ministry of Finance, and the National Development Plan Committee, by the middle of the century, Indonesia will have a population of over 300 million inhabitants, economic growth of 6%, while Gross Domestic Product (GDP) will reach nine trillion dollars and per capita income will be somewhere in the region of $29,000 dollars, indicators which should enable the country to fulfill its goal.
THE FORMULA FOR GROWTH
According to experts, Indonesia’s ability to withstand, with relative ease, the impact of the global financial crisis which hit its South Asian neighbors hard, is one of the country’s key merits.
Its relatively low dependence on exports, and promotion of domestic consumption and investments, have served as effective formulas, ones which the country plans to repeat through a three-phase development plan, with each phase spanning 10 years, drawn up by the current government toward achieving the goal of becoming the fourth global economic power by 2045.
A key factor in the country’s growth is the increase in investment opportunities, above all infrastructure.
Since Joko Widodo was elected President at the end of 2014, his government has made concerted efforts to implement an ambitious investment program to cover the country’s infrastructure deficit.
As the fourth most populated nation on the planet, with over 260 million inhabitants, it is no surprise that one of the driving forces behind Indonesia’s economy is precisely its population.
According to statistics, between 2030 and 2035, known as the “golden age”, 52% of the country’s inhabitants will be of working age. In this context, Indonesians hope to expand their manufacturing and goods-producing industries linked to both domestic consumption and exports.
Meanwhile, the third phase focuses on projects to boost the services sector, especially tourism, an important and perhaps the best-known component of the country’s economy.
Indonesia also has other areas with potential to further exploit toward achieving greater economic growth, such as oil and gas reserves; as well as carbon, copper, zinc and bauxite deposits, key sectors linked to the country’s future development.