The Indonesian government targets economic growth in 2025 to reach from 5.3 to 5.6 percent. Besides, the government is also targeting to reduce the poverty rate to 6-7 percent and the open unemployment rate to 4-5 percent. This target was discussed in a plenary cabinet session chaired by Indonesian president Joko Widodo at the State Palace in Jakarta on Monday (26/02/2024).
The cabinet meeting approved the Government Work Plan (RKP) with the theme "Acceleration of Inclusive and Sustainable Economic Growth" as well as the preparation of the 2025 Macroeconomic Framework and Principles of Fiscal Policy (KEM-PPKF).
Minister of National Development Planning/Head of National Development Planning Agency, Suharso Monoarfa, after attending the cabinet meeting, said that economic growth is inclusive and sustainable, and the word 'acceleration' is used considering that 2025 is the beginning of the National Medium Term Development Plan (RPJMN) for 2025-2029.
He also revealed that the 2025-2029 RPJMN is very strategic, and is part of the initial national long-term development plan for 2025-2045 towards a vision of "Golden Indonesia". It is hoped that through the 2025 Government Work Plan and the 2025 Macroeconomic Framework and Principles of Fiscal Policy, Indonesia can get out of the Middle Income Trap (MIT) in 2038 with a target of an average growth rate of 7 percent or 6 percent at least.
The MIT describes a situation where middle-income countries are unable to make the transition to high-income countries. That is because labor productivity is still low, production costs remain high and the production of goods does not generate high added-value so that it cannot compete internationally. In the end, MIT may result in slowing economic growth, stagnant per capita income, and people's living standards do not increase as well.
Making a transition from MIT to a developed country by 2045 is indeed a serious effort set by President Joko Widodo's government. It requires at least 5-7% of national economic growth. To achieve high and sustainable economic growth, the Government and the business world must strengthen the national economic structure by building infrastructure, encouraging investment, and strengthening export-based processing industries.
To get into a high-income country, the country's per capita income must reach US$ 13,845 and above. It means that Indonesia's per capita income must triple from current levels until 2038 or before President Joko Widodo's target of 2045.
Hopefully, the newly elected government as a result of the 2024 presidential election can realize this target and Indonesia can become a developed country. Of course, it takes hard work and strong determination as well as solid cooperation among various elements to make it come true.