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Indonesia still gunning for fourth-largest economy by 2045
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A person shows newly designed rupiah banknotes obtained from a mobile money exchange service operated by Bank Indonesia on the premises of Mujahidin Mosque in Pontianak, West Kalimantan, on April 18, 2023. (Antara/Nanda)
P
resident Joko “Jokowi” Widodo has long expressed his ambition for Indonesia to become the world’s fourth-largest economy by 2045, when the country marks its centenary of independence, and after years of global turmoil that saw the dollar rise against most emerging market currencies, the government has not abandoned that goal.
Setting his sights on a nearer target, Jokowi said in August last year that the government was vying for the seventh spot by 2030. He noted the importance of building more roads, ports and airports in achieving that goal.
“The foundations to compete with other countries must be arranged and built. Because in the future, it won't be big countries defeating small countries or rich countries beating poor countries. The battle will be fast countries beating slow countries,” said the President on Aug. 5, 2022, as reported by Tempo.
The President’s target looks like a tall order, given that a tool on the International Monetary Fund’s website based on data from an IMF report published in late 2022 only sees Indonesia moving up to rank 15 in 2027, from rank 17 at present.
However, there are different statistical ways to produce such rankings. While the IMF projection above is based on nominal GDP in terms of current United States dollars, Jokowi’s seemingly off-the-cuff statement made no mention of such details.
If the assessment is based on purchasing power parity (GDP by PPP), another popular way to compare economies, then Indonesia is poised to sit in the sixth spot globally by 2027, using the same IMF data.
Against the IMF’s nominal GDP projection for Indonesia, the President’s target of reaching seventh place by 2030 would seem overambitious, but against the IMF’s PPP-based projection, it may seem unnecessarily modest.
