The Jakarta Post
The Institute for Development of Economics and Finance (Indef) has underlined three major economic issues the government should address in 2019 – the current account deficit, low-quality human resources and heavy dependency on natural resources for export.
Indef economist Bhima Yudhistira Adhinegara said the government needed to narrow the current account deficit to US$8.8 billion or 3.37 percent to the gross domestic product (GDP) in the third quarter from $8 billion in the second quarter.
“The solution is to narrow the oil and gas trade deficit by boosting oil and gas lifting and expanding the use of biodiesel,” said Bhima as reported by tribunnews.com on Monday, adding that the government should also expand its trade to non-traditional markets.
He said the dependency on the United States market would endanger the sustainability of Indonesia’s exports because of trade policy uncertainty under the President Donald Tramp administration.
Second, Bhima said 60 percent of employed manpower were only graduates of senior high schools and elementary schools, while many graduates of vocational schools could not be absorbed by the manufacturing industry.
He called on the government to overhaul the curriculum of vocational schools by intensifying internship programs.
Bhima stressed that Indonesia needed to reduce its export dependency on natural resources (70 percent). “Without any improvement in the manufacturing sector, Indonesia will be stuck in the middle income trap,” he added. (bbn)