The Coordinating Minister for Maritime Affairs, Luhut Binsar Panjaitan. (Image via Law-Justice.co)

Luhut to World Bank: Indonesia is still better than other emerging market nations

Alfonsus Adi Putra
Politics & Economic
News Flash Indonesia
Sep 10, 2019
2598
The Coordinating Minister of Maritime Affairs, Luhut Binsar Panjaitan, was not satisfied with World Bank’s projection and scenarios about Indonesia’s future economic growth.

However, Luhut bashed the accuracy of the prediction that it would grow by 4.9% by 2022. The 2020 State Budget Draft (RAPBN 2020) targets Indonesia’s economic growth to 5.3%. Even more, the World Bank predicted that Indonesia’s economic growth rate will be pressed to 4.6% by 2022 due to the trade war between the U.S and China.

“Deceleration of global economy will cause a huge fall in commodity price which will put even heavier pressure on Indonesian Gross Domestic Income (GDI),” tabulated World Bank in its presentation.

Rodrigo Chavez, the World Bank director for Indonesia, refused to give any comment regarding the presentation.

Luhut asserted that Indonesia is doing better than other emerging market economy (EME) nations. EME is the term for a country with low to middle per capita income.

“Indonesia is still better than other EME countries, and we are doing very well. The government has been executing its plans; no reason that the growth would fall short of 5%,” asserted Luhut, being interviewed in his office, Jakarta, Monday (9/9).

One of these plans is to ease the licensing process for investment to come to the archipelago country. The President of Indonesia, Joko Widodo, generally known as Jokowi, had held Limited Meeting to scrutiny the excessive licensing process in some ministries. One of which is the recommendation for sugar import.

“For instance, these recommendations. What for? If we need it, then just import it,” concluded Luhut.

Indonesia is known to rely on foreign investments. Due to the heating trade war between the U.S and China, Indonesia is struggling to attract Chinese companies to expand their production line to Indonesia. However, due to the dependence on foreign investment, Indonesia is vulnerable to outflow should the global economy fail.

The World Bank suggested that rather than trying to battle the current-account deficit, Indonesia should be focusing on attracting foreign direct investments.

Source: https://www.cnnindonesia.com/ekonomi/20190910105053-532-429014/luhut-respons-ramalan-bank-dunia-soal-ekonomi-ri-49-persen

Economy , ASEAN , Indonesia , RAPBN-2020 , World-Bank , Projection