Press Release

Jakarta, Transformasi, 09 October 2014—Political turbulence is not the only major challenge that wil be faced by the government of Joko Widodo – Jusuf Kalla. The new President and Vice President of the Republic of Indonesia will also face a momentous economic challenge.

Executive Director of Transformasi, Nugroho Wienarto, Thursday (9/10) said that one of the major economic challenges that will be faced by the new government is how to meet the needs for new jobs, which has drastically increased as the number of people in the work force grows, fiscal room gets more limited, and poverty reduction efforts intensify.

“That economic challenge is a huge task for the new government. The public also has a very high expectation in this case. Therefore, it needs the appropriate economic policy strategy and it must focus on fulfilling it,” said Nugroho.

With regards to the effort to find the best solution in addressing such economic challenge, Nugroho continued, Transformasi as a networked institution and public policy assessment organization, attempts to contribute ideas to the new government by publishing the book titled “Economic Choices facing the Next President.” This book was written by the Emeritus Professor of Economy from Boston University, Gustav Papanek; Vice Head of the National Economic Committee. Dr Raden Pardede; and Professor of the Economic Faculty of University of Indonesia, Prof. Suahasil Nazara.

The launching for such book, which contains the strategy to achieve economic growth over 10 percent and to create 21 new, good jobs for Indonesia, will be held on Thursday (9/10), starting from 09.00 to 13.00 at the Ballroom of the Four Season Hotel, Jakarta. This activity is organized by Transformasi, supported by Rajawali Foundation.

“This book is a result of an in-depth assessment and research on the economic problems and solution in Indonesia, complete with comprehensive data and analysis and solution to the problems. This will be very useful for economic policy makers in Indonesia,” said Nugroho.

The launching of the “Economic Choices facing the Next President” book will be attended by the Coordinating Minister for Economic Sector, Chairul Tanjung, as the keynote speaker. This event will also presents four speakers, namely an economic expert of Gadjah Mada University A. Tony Prasetyantono, Deputy Country Director of Asian Development Bank (ADB) Edimond Ginting, Deputy Editor in Chief of Kompas Daily Ninuk M Pambudy, and a member of the Jokowi-JK Transition Team.

21 million jobs

Senior Advisor of Transformasi for Economic Affairs, Jonathan Pincus, said that there is nothing more important for Indonesia in the next 5-10 years but to provide jobs for its people. This is because in Indonesia each year, two million people enters the labor force. With recent average economic growth of only 5-6 percent, only 800.000 new labors will be absorbed in current jobs. The rest, about 1,2 million people, are forced to be unemployed or working in informal sector with low wages and low quality of living. “If the Jokowi-JK government fails to address this issue, it can be very dangerous,” he said.

During the administration of Susilo Bambang Yudhoyono (SBY), economic growth in Indonesia is mostly supported by commodity boom, particularly prices of mining minerals, in the global market. Meanwhile, in the labor intensive manufacturing sector, which should have been able to absorb labors, has never grown in the global manufacturing market since 1995. Indonesian manufacturing sector is behind compared to China, Vietnam, India, Thailand, and even Bangladesh. During SBY administration, there is almost no economic policy breakthrough that can induce growth.

Jokowi-JK’s government has an opportunity to bring forth double digit economic growth or above 10 percent. This is caused by the declining economy in China, a country that has dominated the world’s manufacturing sector in the last few decades, as a result of increasing labor wages and the transition to a less labor intensive industry. Some of the manufacturing industrial sectors from China will move to other countries. Indonesia has the opportunity to be the receiving end of such movement, because it has the most supportive resources compared to other Asian countries, including Thailand and Vietnam, especially abundant number of workers.

If Indonesia can take just seven percent of China’s market, there will be 21 million new good jobs available in the country. Thus, double digit growth will be achieved. Therefore, the number of poor people, which consists of about 40 percent of the population, can be reduced.

In the “Economic Choices facing the Next President” book, the opportunity and strategy to achieve such double digit growth and 21 million good jobs are described comprehensively. “This is a once in a century opportunity,” said Jonathan.

Senior Advisor of Transformasi for Government Affairs, Sarwono Kusumaatmadja, added that the manufacturing sector will be a very important sector for the government of Jokowi-JK, not only for creating good jobs and establishing good economic growth, but also for strengthening the political legitimacy basis of Jokowi-JK. Morever, public expectation towards this pair is very high.

“This government must also prepare Indonesia to face the demographic bonus period, which will reach its peak in 2025. With 70 percent of the population included in the working age category, Indonesia needs many new jobs. If not, the demographic bonus will become a demographic burden,” continued the first Minister of Marine and Fishery.
Therefore, Sarwono claims to be very happy that when the new government is ready to take over in Indonesia, this book, which contains an in-depth assessment from three economic experts, is published. “Economic Choices facing the Next President,” according to him, deserves to be the reference for future economic policies. (HAN/Transformasi)

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