DBS Asian Insights Conference: Election's over, what's the government's strategy to grow the economy and achieve Golden Indonesia 2045?
Indonesia, 21 May 2024 - Bank DBS Indonesia this year returned with the DBS Asian Insights Conference 2024 with the theme "Election to Action: Crafting A Sustainable Future Towards Golden Indonesia 2045 and ESG Excellence". The presence of Deputy Minister of State-Owned Enterprises (SOEs) of the Republic of Indonesia
Kartika Wirjoatmodjo
, Deputy Minister of Finance of the Republic of Indonesia
Suahasil Nazara
, Senior Advisor to the Coordinating Minister for Economic Affairs of Indonesia
Raden Pardede
, Executive Director of Indonesian Political Indicators
Burhanuddin Muhtadi
, and Chief Economist and Managing Director of DBS Group Research
Taimur Baig
enriched the event with strategic insights on the future of Indonesia's economy post General Election. In addition, the conference also highlighted steps towards sustainability in Environmental, Social, and Governance (ESG) aspects.
President Director of PT Bank DBS Indonesia
Lim Chu Chong
said, "Indonesia's green taxonomy has set a new standard for the application of ESG values. As the first bank in Singapore to join the Net Zero Banking Alliance, DBS Bank Ltd (DBS Bank) and Bank DBS Indonesia are committed to supporting corporate customers with sustainable financial solutions that focus on renewable energy and infrastructure. This is done as a form of our readiness to welcome the energy transition in 2050. We also continue to support the vision of 'Golden Indonesia 2045' to transform Indonesia into a high-income country, promoting sustainable development and regional prosperity."
Following the election, investment performance in Indonesia is showing significant signs of revival. This fact is reinforced by economic growth that has been above 5 percent for seven consecutive quarters. Moreover, with various government policies, the inflation rate is still maintained.
Deputy Minister of Finance of the Republic of Indonesia
Suahasil Nazara
also gave an overview of fiscal policy to encourage economic growth, “Last year, we finished the fiscal deficit with 1,6 percent of the Gross Domestic Product (GDP). It is a strong position that is recognised by the international community that Indonesia is not exposed to the raise because our financing are coming from the market. You can see that some countries are still struggling to manage their debt situation and at the same time also to manage growth. I believe because of the resilience of Indonesia's economy, we can improve our fiscal deficit from 1,6 percent to 1,2 percent to our GDP without sacrificing the economy growth of the country."
In the long term, Indonesia has an ambitious goal of Golden Indonesia 2045 to become the epicenter of economic growth in Southeast Asia and one of the world's top five economies. To realize this aspiration, interventions in downstream industry strategies and best practices in ESG implementation are required.
“Our mission is clear to become pioneers in the green economy, leaders in social inclusion, and innovators beyond digital technology, developers of world-class energy structure. With this Initiative, SOE are committed to building a prosperous future for all Indonesian and working with all investors,” said Deputy Minister of State-Owned Enterprises (SOEs) of the Republic of Indonesia
Kartika Wirjoatmodjo.
In the face of global uncertainty, Indonesia remains optimistic about its economic growth projections. Factors such as industrial downstreaming and increasing non-oil and gas exports provide positive hope for achieving the 5 percent growth target. Chief Economist and Managing Director of DBS Group Research
Taimur Baig
stated, "The resilience of the Indonesian economy in the face of global challenges should be appreciated. Steady growth provides room for Bank Indonesia (BI) to remain steadfast in managing price and rupiah stability. Following the rate hike in April, while the possibility of further rate hikes remains, some of the measures that could be taken include sterilized intervention, bond purchases, attracting inflows through less-than-a-year bonds, and asking state-owned companies to optimize/stop large dollar purchases."
Not only that, but Indonesia has just gone through an election period. Some analysts estimate that President-elect Prabowo Subianto's flagship program of providing free food and milk will cost around IDR450 trillion per year or about 13 percent of total government spending. In addition, the National Capital City (IKN) project and an increased defense budget will also suck up state funds. The 2025 Government Work Plan (RKP) targets a debt-to-GDP ratio of between 39.77-40.14 percent, higher than this year's government debt target of 38.26 percent.
This requires good planning by the government, especially by the elected President and Vice President. "Downstreaming will be continued by Prabowo. He is also interested in the agricultural sector and has a concern for food security," explained Executive Director of Indikator Politik Indonesia
Burhanuddin Muhtadi.
DBS Asian Insights Conference is Bank DBS Indonesia's annual conference that brings together global thought leaders to discuss the opportunities and challenges of change in Indonesia. The conference is expected to transform concerns and doubts into action and strategic decisions regarding future business direction.
In 2024, the DBS Asian Insights Conference also had a special session on companies' efforts for greener business practices with the theme "Sustainable Downstream Processing: Balancing Economic Growth with Environmental Integrity". The session was attended by Kadin Energy Transition Task Force Chairman
Anthony Utomo
and PT PLN (Persero) Executive Vice President Commercial Product Development
Ririn Rachmawardini.
Information about the DBS Asian Insights Conference 2024 can be found on Instagram:
@dbsbankid
and reruns of the conference can be accessed on
Bank DBS Indonesia's YouTube
channel.
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