Keynote Speech of President of the Republic of Indonesia at the 2021 CNBC Indonesia Economic Outlook 2021 on Thursday, 25 February 2021 from Merdeka Palace, Special Capital Region of Jakarta
Assalamu’alaikum warahmatullahi wabarakatuh,
May peace be upon us all,
Greetings of Virtue.
Distinguished Ministers of the Indonesia Onward Cabinet,
Distinguished Founder and Chairperson of CT Corp Mr. Chairul Tanjung,
Distinguished economists, investors, and market players,
Ladies and Gentlemen.
We have been through one year of the most difficult time due to the COVID-19 pandemic. We have undergone the most difficult period of our economic growth. And now, 2021 is the recovery period, the resurrection period that we have to usher in with optimism, enthusiasm, and hard work, full of courage.
World financial agencies, the IMF (International Monetary Fund), the World Bank, and the OECD (Organization for Economic Co-operation and Development) have forecasted that Indonesia’s economic growth in 2021 will grow to approximately 4-5 percent. And we must prove that Indonesia can fare better than predicted. The key is simple. The nation’s energy must unite, must focus on handling health crises and increasing economic growth with high quality.
Distinguished Ladies and Gentlemen,
The key to our economic recovery is the ability to overcome the pandemic. We must continue the 3M measures (washing hands, wearing a mask, maintaining a safe distance), 3T measures (testing, tracing, treatment), and micro-scale public activity restrictions and at the same time, now we are carrying out mass vaccinations.
We must work hard to obtain vaccines that every country in the world is fighting for. Thank God, among Asian countries, we are the foremost country to carry out vaccination. Besides prioritizing workers who provide direct service for the public, the Government has been overseeing vaccination in crowded clusters to achieve herd immunity immediately.
It is my hope that everyone can participate to support this vaccination drive. Indonesia must be safe from COVID-19 immediately and we will show the world that we are foremost in handling this global crisis. The speed in the management of this health crisis is also in harmony with the acceleration of our national economic recovery.
Therefore, this year the Government has set aside a budget of Rp372 trillion to accelerate national economic recovery. We have provided a number of stimuli to the demand side (and) supply side through social aid program, the Family Hope Program, wage subsidy, Pre-employment Card, numerous labor-intensive programs, Productive Aid for MSMEs, as well as loan relaxation and restructuring, tax relaxation, and other facilities.
Through the labor-intensive program and other Government spendings, short-term employment opportunities can be created, but continuous job opportunity creation and expansion come from businesspersons in the private sector. By reviving existing businesses or starting new businesses; by using personal funds, funding from banking and non-banking agencies, or inviting investors, inviting foreign investment.
Distinguished Ladies and Gentlemen,
In order to improve economic growth in the private sector, credit must still be issued with great care while maintaining the health of banks. I am pleased to receive a report that the capital adequacy ratio remains at 23.78 percent and banks have provided adequate reserves should there is a risky credit increase.
I have also received a report that the current amount of foreign exchange reserve of Bank Indonesia is USD135 billion, more than enough to fund foreign debt installment and imports for one year. Rupiah is quite stable, too. The capital market also remains attractive with the total stock capitalization of Rp6,970 trillion and the number of local investors increased rapidly to four million retail investors.
Export growth is higher than import growth, so there was a trade surplus of USD21.74 billion in 2020 although we had a deficit of USD3.59 billion in 2019. In fact, we exceeded the target of foreign investment and domestic investment, achieving 101.1 percent with a value of Rp826.3 trillion; 50.1 percent of domestic investment and 49.9 percent of foreign investment. The capital was invested 50.5 percent outside Java island and 49.5 percent in Java island. The investment has moved a little out of Java. It means that we have capital, we have strong capital to rebound and grow.
In addition, preparations for economic recovery have been made through structural reforms. The Job Creation Law and the implementing regulations, government regulations and presidential regulations, have been completed and will provide facilities for job creation, job opening, and economic growth. Sovereign Wealth Fund INA (Indonesia Investment Authority) has been formed so that we have a more affordable funding alternative.
Our strong capital will be more effective with public support. The contribution of economists, businesspersons, and investors to formulate economic regulations that are most suitable for Indonesia is valuable, so when the pandemic is over, we can grow well. And let us prove that our economic growth in 2021 is higher than predicted and jobs are available and the people’s welfare can improve.
That concludes my speech.
I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh. (DH/MEB)