Bappenas: Economic Growth Must Be 6% to Escape Middle-Income Trap

TEMPO.CO, Jakarta - National Development Planning Minister or Bappenas Head Suharo Monoarfa said Indonesia must pursue economic growth of 6 percent by 2022 in order to escape the middle-income trap.

According to him, the effort must be accompanied by the economic transformation in various sectors. “Without economic transformation, we will not be able to graduate from the middle-income trap in 2045,” said Suharso in the 2021 central development coordination meeting which was broadcast virtually on Thursday, April 29.

Indonesia initially targeted to escape the middle-income trap by 2036 so that by 2045, it could be a developed country while enjoying its demographic bonus.

However, the plan was expected to slip due to the Covid-19 pandemic. “This pandemic condition has an impact on development performance and disrupts our efforts to exit the middle-income trap,” said Suharso.

He opined that the government needs to adjust the macroeconomic framework and make various adaptations to catch up with the gap. He also believed that 2022 is the key to the country’s economic growth after the pandemic crisis.

If Indonesia cannot record 6 percent growth or just 5 percent, it will not pass the middle-income trap even until 2050. It will also lag behind other countries in Southeast Asia, such as the Philippines and Vietnam that targeted to be high-income countries by 2027 and 2043, respectively.

Suharso Monoarfa was worried that Indonesia would be the country with the lowest competitiveness in Asia. “It is feared that its total factor productivity or TFP will be the lowest [in Asia],” he said.

Read: Jokowi Highlights Endeavors to Get Out of Middle Income Trap

FRANCISCA CHRISTY ROSANA