Bappenas Reveals Why Indonesia's Growth Rate Stuck at 5%

TEMPO.CO, Jakarta - National Development Planning Minister or Bappenas Head, Suharso Monoarfa, revealed the main reason why Indonesia's economic growth has not exceeded the level of five percent. He said it was attributable to the decline in productivity that occurred from 2010 to 2019.

“Data from Statistics Indonesia shows Indonesia's productivity plummeted from 2010-to 2019. The decline in productivity suppresses Indonesia's economic growth which tends to be stuck at five percent,” said Suharso in a virtual 2022 Central Development Coordination Meeting on Thursday, April 21.

This condition, he continued, was exacerbated by the slow improvement of state innovation development. In 2021, Indonesia was ranked 87th out of 132 countries on the Global Innovation Index. Compared to other countries in ASEAN, Indonesia's innovation index was considered low.

The productivity rate continued to nosedive in the wake of the COVID-19 pandemic. During the past two years of dealing with the pandemic threat, Indonesia has not been able to restore the poverty level and restore the business sector.

“The pandemic wounds tend to lead to decreasing productivity. Thus, increasing productivity is a crucial issue,” said Suharso.

Suharso underlined that productivity growth is fundamental for the Indonesian economy to grow in the long term. Therefore, it will be the government's focus on the 2023 work plan.

Read: Indonesia's Economic Growth to Strengthen in 2022, 2023: ADB

FRANCISCA CHRISTY ROSANA