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Bappenas to focus on raising productivity in 2023
The policy is hoped to put Indonesia back on track with its 2045 development goals.
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President Joko 'Jokowi' Widodo (second right in white) visits a Hyundai factory that produces the electric car “Ionic 5” in Bekasi, West Java on on March 16. (AFP/Presidential palace)
T
he National Development Planning Agency (Bappenas) announced on Thursday that raising productivity would take the front seat in the 2023 government working plan (RKP) as Indonesia seeks to boost economic growth while scaling back state spending.
Bappenas head Suharso Monoarfa outlined eight policies to improve productivity that included eradicating extreme poverty, improving health care and education, recovering businesses, pushing low-carbon development, building water and sanitation infrastructure and building the new capital city.
The government aims to maintain Indonesia's gross domestic product growth at an average 5.7 percent annually until 2045 to exit the middle-income trap.
"By improving productivity, hopefully we can increase our potential output so that we can sustain our economic growth trajectory," said Suharso.
He said Indonesian productivity dropped from 2010 to 2019, meaning economic growth stagnated at around 5 percent per year. The COVID-19 pandemic worsened the situation as Indonesia faced learning loss, business closures and rising unemployment.
"The lack of productivity becomes a much greater problem when our innovation index does not help either, as we score lower than the rest of ASEAN," he added.
Thus, Bappenas hopes that in 2023 consumption and investment will drive economic growth, gaining a minimum of 5 and 6 percent, respectively, while the Finance Ministry cuts back state spending.
