the challenges and opportunities of indonesia, … · clinton to gusdur (during the third and the...

THE CHALLENGES AND OPPORTUNITIES OF INDONESIA, 2014-2019, 2019-2024

University of Indonesia Department of Economics

Dorodjatun Kuntjoro-Jakti, PhD. Professor Emeritus

(Jakarta, September 2014)

FORWARD PROJECTION

BACKWARD PROJECTION Sebagian terbesar kajian “future studies” menggunakan

metode: “The Future of the Past”

Di mana masa mendatang diproyeksikan sebagai kelanjutan/konsekwensi perkembangan-perkembangan masa lalu.

Sejumlah terbatas melakukan “gap analysis” dengan membandingkan “Das Sollen” dengan “Das Sein”

Sebagian lagi melakukan “comparative analysis” pada sekelompok negara yang pernah mengalami proses-proses yang serupa

versus

Prof. Dorodjatun Kuntjoro-Jakti, PhD.

1

RISIKO “LONG-TERM PROJECTION EXERCISES”

Tidak diketahui (NOT KNOWN)

Diketahui (KNOWN)

UNKNOWN-KNOWNS (Tidak diketahui bahwa telah

diketahui)

THE PRESENT: KNOWN-KNOWNS

(Diketahui telah diketahui)

THE FUTURE

KNOWN-UNKNOWNS (Diketahui tidak/belum

diketahui)

Telah diketahui (KNOWNS)

Tidak diketahui (UNKNOWNS)


2

DARI PENDEKATAN INTER-DISIPLIN

PENDEKATAN MULTI-DISIPLIN PENDEKATAN SATU DISIPLIN KE

Pendekatan multi-disiplin

Pendekatan inter-disiplin

Pendekatan satu-disiplin

Pendekatan inter-disiplin

MASA KINI

MASA DEPAN


3

KE

PARAMETER-PARAMETER KEBIJAKAN 2015-2025

- Demography is destiny - Geography is destiny

VARIABEL-VARIABEL KEBIJAKAN 2015-2025 Tergantung kepada “Gap-Analysis”, yakni hasil membandingkan “Das Sollen” dengan “Das Sein”


4

CLINTON TO GUSDUR (During the third and the last visit of Gus Dur to Washington DC in early 2001) Mr. President, I wish Indonesia a great success. A successful

Indonesia will help to characterise the 21st Century. Indonesia is now the world’s third largest democracy. Indonesia is the fourth large-population country, with the world’s largest Moslem population. If Indonesia can prove to the world that Islam and democracy are compatible – you show us the way.

(I was Indonesia’s Ambassador to Washington DC in the period of March 1998-July 2001, serving Presidents Suharto, Habibie, Gusdur, tasked with shuttle diplomacy between the two capitals.)


5

- After 20 years of rule by the autocratic Sukarno (1945-1965) - After 32 years of rule by the dictatorial Suharto (1966-1998)

- Starting with Habibie (1998) - Expanded by Gus Dur (1999-2001) - Consolidated by Megawati Sukarnoputri (2001-2004) • Indonesia undertook simultaneously - REFORMASI - DEMOKRATISASI - DESENTRALISASI • Including the cessation of Military Dual-Function - At a time of Multi-dimensional Crisis and - Under the complex bailout scheme of IMF which covered more than 20 LOIs

(Letter of Intent), consisted of more than 100 items of conditionalities - In cooperation with CGI (Consultative Group for Indonesia)


6

POLITICAL ENVIRONMENT

BBB+

BBB

BBB-

BB+

BB

B+

B

B-

CCC+

CCC

CCC-

CC

Asia monetary crisis hit in 1997-1998

Baa1

Baa2

Baa3

Ba1

Ba2

Ba3

B1

B2

B3

Caa1

Caa2

Caa3

Subsidized Oil price doubled

Global economic

crisis in 2008 Indonesia was “investment

grade” before the 1998 crisis

Inve

stm

ent

gra

de

Non

Inve

stm

ent g

rade

Investment rating

BB+ Baa3

BBB-


7 RATING


8

A simplified picture of the rating indicates that Indonesia is expected to reach the S&P investment grade of BBB+ around 2016. At that time Indonesia’s will reach the position it had enjoyed before 1997. Note, however, that since 2009 Indonesia had continuously enjoyed the position of “Stable outlook” with no “Review/Credit Watch” for both foreign currency as well as local currency ratings.


9

Indonesia’s Potential: demographic bonus

Source: Government of Indonesia (2011), “Master Plan: Acceleration and Expansion of Indonesia Economic Development 2011-2025

INDONESIA: Age Structure of Population and Dependency Ratio (%), 1950-2050

• Indonesia has the fourth ranking population in the world, with 237.6 million people (2010), and the working age population is close to 70% of the total population. Population growth rose to 1.49% in 2010.

• Indonesia’s window of “demographic bonus” (only if it accompanied by better quality education to produce skilled workers and more job creation) will close in the next decade, as the dependecy ratio (i.e. ratio of young and elderly to working age) will start to rise after 2030.


10 CHALLENGES


11

TEN LARGEST COUNTRIES AND THEIR POPULATION, SELECTED YEARS (millions)

95% 95% 93% 84% 71% 75%

1992 1997 1999 2004 2009 2014

VOTERS TURNOUT


12

Direct & Open General Election

High Generasi Millenium participation

Indonesian presidential election, 2014

Nominee Joko Widodo Prabowo Subianto

Party PDI–P Gerindra Running mate Jusuf Kalla Hatta Rajasa Popular vote 70,997,833 62,576,444 Percentage 53.15% 46.85%

Source: KPU


13


14

Summary of the 9 April 2014 Indonesian People's Representative Council election results


15

Source: Kompas - 25 Agustus 2014


16

Source: Kompas - 25 Agustus 2014


17

INDONESIA ECONOMIC EXCLUSIVE ZONE


18

INDONESIA ARCHIPELAGIC SEA LANES

SLoC MALACA

ALKI I

ALKI II ALKI IIIA ALKI IIIB

ALKI IIIC

Note: ALKI = SLOC (Alur Laut Kepulauan Indonesia = Sea-Lane of Communication)


19

QS (Strategic Question) Mengapa terjadi ketegangan yang semakin memanas di wilayah Laut Cina Selatan?

Country name Crude oil and

liquids reserves (billion barrels)

Natural gas reserves (trillion

cubic feet)

Brunei 1.5 15

China 1.3 15

Indonesia 0.3 55

Malaysia 5.0 80

Philippines 0.2 4

Taiwan - -

Thailand - 1

Vietnam 3.0 20

Total 11.2 190

ESTIMATED PROVED AND PROBABLE RESERVES IN THE SOUTH CHINA SEA

Source: EIA


20


21 OPPORTUNITIES

World Development Indicators database, World Bank, 1 July 2014


22

World Development Indicators database, World Bank, 1 July 2014


23

External sector


24 THREATS

Fuel prices during Megawati Soekarnoputri’s presidential term


25 THREATS

Impact of higher fuel price on current-account deficit


26

POLICY FRAME 2014-2019

What Indonesia must do DAS SEIN

What Indonesia would like to do

DAS SOLLEN (Idealism)

What is beyond Indonesia’s capacities (Realism)

REFORMASI - Reinvent GOI

DEMOKRATISASI - Consolidate checks

& balance

DESENTRALISASI - Develop regional

capacities

Out from the 3 decades-long Middle Income Trap

Out from the

Resource Curse

Structural bottlenecks & mismatches can probably be overcomed only in 2019-2024


27

Correlations: The Middle-Income Trap By Evan Applegate June 13, 2013

Speaking on June 6 in Chengdu, China, Executive Vice Premier Zhang Gaoli said his country “has to stand up to the test of striding over the ‘middle-income trap.’ ” Zhang was referring to a well-known phenomenon: Many nations can move from low-income to middle-income status, but as labor costs rise only countries that boost productivity, improve education, and master innovation fully develop.

www.businessweek.com Prof. Dorodjatun Kuntjoro-Jakti, PhD.

28

http://www.businessweek.com/authors/1040-evan-applegate

The Economist, August 2nd 2014


29

Source: FT.com – Global economy battle decline in productivity growth – 16 Januari 2014


30

Source: FT.com – Global economy battle decline in productivity growth – 16 Januari 2014


31

Prof. (Emeritus) Dorodjatun Kuntjoro-Jakti, PhD.

Email : [email protected]

the challenges and opportunities of indonesia, … · clinton to gusdur (during the third and the...

Documents