JAKARTA – Deputy Minister of Investment and Downstream Industry, Todotua Pasaribu, acknowledged that meeting President Prabowo Subianto’s 8% economic growth target is a significant challenge for the government. However, he emphasized that it remains an attainable goal with the right strategies in place.
Todotua highlighted three key areas to drive growth. The first focus is on accelerating investment realization, particularly in the downstream industry. The Ministry of Investment aims to streamline the investment climate by digitizing licensing services and continuing to develop 23 Special Economic Zones (SEZs), as reported by bisnis.com.
The ministry has identified 28 priority commodities for downstream development, grouped into three clusters: minerals, oil and gas, and plantation, maritime, fisheries, and forestry sectors.
The second focus is on digital transformation. According to Todotua, digitalization is essential for simplifying the investment process and enhancing overall economic performance.
The third area of focus is the green economy. Todotua explained that green economic initiatives align with President Prabowo’s Asta Cita vision and mission document, making sustainability a core objective.
“We understand the conditions and phases required for economic growth and recognize that the main challenge ahead is attracting foreign direct investment,” Todotua stated during the Strategic Investment Forum for Sustainable Economic Development in Central Jakarta on Wednesday (November 20, 2024).
He also noted that the National Development Planning Agency (Bappenas) has set a target for investment realization in the coming year.
“In terms of preparation, the first step is to create a favorable investment climate. For next year, the government has set an investment target of IDR 1,900 trillion, encompassing both domestic and foreign investment,” Todotua shared, as reported by MediaIndonesia.com.
Furthermore, he revealed that the government aims to achieve an investment realization of IDR 13,528 trillion during the 2025–2029 period. This ambitious target is essential to achieving the 8% economic growth goal during the Prabowo-Gibran administration.
12% VAT Increase Will Not Hamper Investment
Regarding the planned 12% Value Added Tax (VAT) hike starting early next year, Todotua assured that it would not hinder incoming investments.
“Future investments will target projects with higher added value in downstream industries. The accumulation of these efforts will balance the impact of the 12% VAT increase,” Todotua stated during an interview in Jakarta on Wednesday (November 20), as reported by MediaIndonesia.com.
He also mentioned that the government has prepared incentive strategies for investors entering the market after the VAT increase.
“Of course, we will assess the scale of investment inflows and their coverage to gauge the effects of the 12% VAT,” Todotua elaborated.
Deputy Finance Minister: Strengthening Strategies for Indonesia’s Economic Foundations
Deputy Finance Minister Suahasil Nazara emphasized the importance of reinforcing the country’s economic foundations through comprehensive strategies to achieve sustainable 8% growth.
Suahasil highlighted three primary challenges facing Indonesia: digital transformation, climate change, and demographic shifts.
He stressed the need to view digital transformation as an opportunity to strengthen the economy’s foundation.
“Digitalization brings efficiency, effectiveness, and speed. The question is, how do we create jobs through digitalization? We must ensure that digitalization benefits job seekers and society while reducing the digital divide,” Suahasil stated on Wednesday (November 20, 2024), as reported by PasarDana.id.
Regarding climate change, Suahasil underlined the importance of renewable energy as a new growth driver rather than a burden. He described renewable energy projects as vital investments for achieving sustainable economic growth.
As for demographic challenges, Suahasil pointed to the aging population and stressed the importance of early investments in healthcare and education.
Suahasil also proposed two major strategies to boost economic growth: reallocating resources to high-productivity sectors, such as advanced manufacturing and services, and improving efficiency in labor-intensive industries through mechanization and digitalization.
“We must promote high-productivity sectors, such as financial services and manufacturing, while ensuring labor-intensive industries become more efficient,” he explained.
In conclusion, Suahasil highlighted the role of the state budget (APBN) as a stabilizer and catalyst to support growth.
“The APBN must act as a shock absorber to maintain stability while promoting equitable allocation and distribution,” Suahasil concluded.
Sources: bisnis.com, pasardana.id, mediaIndonesia.com
Image source: worldspectrum (pexels.com)
