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Foreign direct investment vital for unlocking Indonesia’s potential
Indonesia's ascent to among the world's top 10 economies is not a matter of if but when.
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Nickel smelting plants at the Indonesia Weda Bay Industrial Park (IWIP) in Lelilef, North Maluku, operate on July 7, 2024. (AFP/Azzam Risqullah)
F
or decades, the world's top 10 economies have been a club dominated by developed nations. However, the landscape of global economic power is shifting – and doing so rapidly.
It was only 20 years ago that emerging economies like China, India and Brazil broke into this exclusive group, challenging the traditional hierarchy and reshaping the landscape of global economic power dynamics. This evolution also underscores the potential for developing nations to rise and claim their place on the global stage.
A number of meetings that I have had with potential foreign investors all confirm that Indonesia is ready to do just that.
But what exactly defines a developing economy? It is a nation with a substantial population, significant natural reserves and a trajectory of rapid economic expansion. Indonesia fits this definition perfectly. As a significant member of ASEAN, a geopolitical market comprising 10 percent of the world's population, Indonesia holds considerable sway. Within this group, Indonesia alone accounts for a staggering 41 percent of the population and 37 percent of the region's total economic output.
Although Indonesia, like many other countries, is currently facing challenging conditions including higher interest rates and currency depreciation, it has proved time and time again that its economy is resilient, thanks to sound fiscal policies. Clearly, then, Indonesia's ascent to the ranks of the world's top 10 economies is not a matter of if but when.
The significance of this has not gone unnoticed by the Indonesian government, and it has set an ambitious target to achieve this milestone by 2045. This commitment reflects not only a bold vision for Indonesia's future but also a strategic imperative to secure its position as a global economic powerhouse. It is also a commitment that is expected to be fully supported by president-elect Prabowo Subianto when he takes over as Indonesia’s new leader in October this year.
To realize this goal, Indonesia has mapped out a comprehensive strategy which, at its core, is the relentless pursuit of accelerated and sustainable investments, both domestically and internationally. This is a multifaceted approach that encompasses targeted policies, regulatory reforms and strategic partnerships aimed at unleashing Indonesia's full economic potential.
