Sri Mulyani Talks of Keys to Escape Middle-Income Trap

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati said Indonesia is still recognized as a middle-income country. According to her, based on the experience of 190 countries in the world, the majority of them were stuck in the middle-income trap.

“Not many countries in the world, or less than 20, are able to escape the middle-income trap. This is a real challenge,” Sri said in the Center for Strategic and International Studies or CSIS webinar on Wednesday, August 4.

The causes of the phenomenon, she added, have been studied. Sri explained the first key to achieve high-income status is the quality of human resources.

She opined countries that are able to invest in and improve the quality of human resources are identical to those that continue to increase productivity and innovation. “Not many countries can deal with this HR challenge, even though they recognize that HR is fundamental.”

In the development of human resources, the most important are education, health, and social security, the former managing director of World Bank said.

The second key is the development of the health sector. In the wake of the COVID-19 pandemic, Sri said Indonesia reallocated a lot of budget to the health sector. 

“This is still challenging homework. The reform in the fields of education and health are the two cores for us to escape the middle-income trap,” Sri Mulyani said.

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

MUHAMMAD HENDARTYO