ASIATODAY.ID, JAKARTA – Professor of Economics and Indef Researcher, Didik J Rachbini, highlighted Indonesia’s economic growth compared to other countries in the Asian region.
According to Didik, the Indonesian economy is experiencing stagnant growth of 5 percent or below because it relies on consumption and the service sector, which is mixed with the informal sector.
“With a service sector that is not modern and only relies on household consumption, the economy loses its locomotive, which in turn causes the economy to grow only slowly or moderately,” said Didik, quoted on Wednesday, June 19 2024.
As a comparison before our eyes is the high economic growth so far in Vietnam and India. Why have India and Vietnam succeeded in driving high economic growth?
“There is only one answer, namely because they succeeded in encouraging industry as a locomotive for growth. The industrial sector in India grew double digits, attracting economic growth of up to 7 percent. “In contrast, in the last two decades, Indonesia’s industrial sector has only grown by under 5 percent, so it is impossible to attract economic growth to above 6 percent,” he explained.
Why has Indonesia failed to encourage high economic growth over the past two decades?
“The answer is the same, namely because it failed to place the industrial sector as a locomotive of growth and at the same time because the Ministry of Industry is stagnant and ineffective in implementing its industrial policy. “The critical factor in economic growth during the Prabowo Subianto administration will lie in this ministry,” he explained.
Didik views Prabowo’s campaign promise that economic growth will be driven to 8 percent, a target that is almost impossible with current policies and a ministry that is not doing much to change the situation.
“If you want to be different from the previous government, then the key to success lies in whether or not you will succeed in improving the Ministry of Industry and its industrial policies. “Without that, Indonesia will become an underdog in ASEAN,” he stressed. (ATN)
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