Widodo, Indonesia hails a ‘strong’ economy and is gaining global attention.business and economic news

Medan, Indonesia – Indonesia is at the “top” of international leadership and its economy is strong enough to withstand global headwinds, Indonesian President Joko Widodo said in his annual speech to parliament.

Speaking optimistically ahead of Indonesia’s 77th independence day on August 17, Widodo said that “in the midst of global economic turmoil”, “crisis after crisis plagues the world. However, the country’s economic fundamentals remain strong.

Addressing the problem of rising prices, Indonesia’s leader said inflation reached 4.9% in July, compared with 7% across the Association of Southeast Asian Nations (ASEAN) and 9% in advanced economies. .

Widodo said the Southeast Asian country is also gaining prominence on the international stage as a result of its continued G20 presidency and next year’s ASEAN presidency.

“That we [are at the] The pinnacle of global leadership,” said Widodo, dressed in the traditional moss green and gold paxia costume of the Bangka Belitung Islands.

“to be confident”

Deni Furiawan, an economics researcher at the Center for Strategic and International Studies (CSIS), called the speech “very optimistic and full of confidence.”

“This kind of optimism is good for encouraging public participation, but it is also dangerous and can lead to overconfidence,” Juliawan told Al Jazeera.

Juliawan said Indonesia’s economic fundamentals appear to be stronger than some other countries, but the situation has been distorted by government interventions to curb the sharp rise in commodity prices.

“Inflation and exchange rates are holding at the moment, but the costs of doing so are high,” he said. “Energy subsidies have reached 502 trillion rupiah ($34 billion), although inflation is low as he has not adjusted fuel prices.”

Like many countries in the world, Indonesia faces supply chain problems caused by a combination of factors such as the war in Ukraine and high consumer demand after the COVID-19 pandemic.

Widodo said in his speech that Indonesia’s growing international standing has prompted a growing interest in downstream industries, including the processing of abundant raw materials such as crude oil and nickel, to enable the export of more expensive final products. He said that it reached

According to Widodo, the Indonesian economy grew 5.44% in the second quarter of 2022, posting a surplus of around IDR 364 trillion ($24 billion).

Steel exports are projected to reach IDR 306 trillion ($20.7 billion) in 2021, 18 times higher than in 2016, and reach IDR 440 trillion ($27 billion) by the end of 2022, according to Indonesian leaders. there is

Friawan, a CSIS researcher, said the government’s focus on downstreaming had controversial results.

“The president is only looking at downstream nickel successes in terms of increased investment and steel exports, and has not carefully calculated the added value Indonesia will actually get,” he said.

“Keep in mind that having a lot of natural resources does not mean that Indonesia can compete in industrial and manufacturing production with natural resource inputs. , technology, skills, capacity and economies of scale.”

Widodo also mentioned Indonesia’s proposed heritage project for the new capital of Borneo, Nusantara. The project, which aims to raise 80% of his funding from private companies, has been controversial, with some critics arguing that it could lead to the displacement of indigenous peoples and violate the constitution. It says it could centralize power in some way.

“What is interesting, in my opinion, is that Jokowi remains committed to the implementation of this large-scale project despite the uncertainty of the domestic and international economic situation,” said a senior fellow at the Iseas Yusof Ishak Institute. Shiwage Dharma Negara told Al Jazeera.

“While the president remains optimistic about the economy’s ability to recover from the pandemic, he advises caution and caution in a highly uncertain situation.”

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