TEMPO.CO, Jakarta - Finance Minister Sri Mulyani recently said that urbanization has a positive effect towards the country`s economic growth.
She said that urbanization has driven household consumption, investments, up to government spending. “It further impacted the economic growth,” she said during a seminar entitled ‘Managing Urbanization for Sustainable Cities’ today, Dec. 19.
Read: Sri Mulyani: Village Fund Increases Yet No Drop in Poverty
She argued that urbanization is also able to open new jobs that reduce unemployment and increases income. Sri Mulyani also asserted that there are no world countries that are able to reach middle-class status without significant population shift from rural to urban areas.
Based on World Bank’s analysis report, one percent population growth is able to drive the GDP per capita. India is able to reach a 13 percent growth, meanwhile, China’s one percent urban population growth able to improve its GDP up to 10 percent.
Unfortunately, she said, Indonesia’s GDP per capita growth is only 4 percent for every one percent urban population increase. It is predicted that 75 percent of the population will live in urban areas by 2050.
Sri Mulyani said that the government must be able to create an efficient, inclusive, and sustainable urbanization. She also urged the government to create a heterogeneous place to live in.
Vindry Florentin
