Remarks of President of the Republic of Indonesia at Bank Indonesia Annual Meeting 2023, at Grha Bhasvara Icchana, Bank Indonesia Head Office, Jakarta Special Capital Region, November 29, 2023

Bismillahirrahmanirrahim.

Assalamu’alaikum warahmatullahi wabarakatuh,

Good evening,

May prosperity be upon all of us,

Om swastiastu,

Namo buddhaya,

Greetings of Virtue.

Distinguished chairpersons and leaders of the high state institutions, Your Excellencies the ambassadors of friendly countries, the Ministers of the Indonesia Onward Cabinet;

Distinguished Governor of Bank Indonesia and the Board of Governors of Bank Indonesia;

Distinguished chairpersons and leaders of the OJK (the Financial Services Authority) and the LPS (The Deposit Insurance Corporation), governors, regents and mayors, president directors of banking and financial institutions;

Distinguished ladies and gentlemen.

First of all, I would like to express my gratitude for the synergy that has been built so far among Bank Indonesia (BI, Indonesia’s central bank), the Ministry of Finance, the OJK, the LPS, regional governments and the private sectors, so that our economic recovery process can run well and our economic stability remains stable.

As previously stated by Governor of Bank Indonesia, Mr. Perry Warjiyo, the world is not doing well. Many domestic issues arising in several countries already have impacts on global community, such as inflation and high interest rates which are currently hitting the United States and economic slowdown and property crisis which are currently going on in People’s Republic of China. The increase in geopolitical tensions also occur all of a sudden. For example, wars in both Ukraine and Gaza erupt suddenly, unexpectedly, without any previous warnings, while all countries wish to be warned of any potential wars so that they can take time to get prepared thoroughly.

For that reason, I always want to attend conferences, summits, international meetings because I really want to hear where all of these are leading us to. Will the wars still go on for a long time or can they stop in the near future? What impact will they have on our economy, what impact will they have on our country’s food supply, what impact will they have on energy, especially the one related to prices? So within two weeks I came to Saudi Arabia twice, twice in two weeks. I just wanted to hear what the war in Gaza would be like, how long the Israeli-Palestinian conflict would last, because there were 57 countries present there at that time. However, at the end of the summit, I concluded in my heart that it was impossible for the war to be stopped in the near future.

Therefore, we must jointly anticipate the impact of the existing war. Because when it comes to war, its negative impact will be everywhere, from global supply chain disruption, food price spikes, to energy price spikes. Everything will be affected, everything.

We must also anticipate the impact of climate change. In the past, we always talked about climate change, but we still failed to understand what it really was. But now we really feel it and its impact is everywhere. We really feel global warming and as a result, our food production has decreased slightly and 22 countries are limiting their food exports. This also happens suddenly. In the past, many countries offered rice imports and claimed that they had ample stock. Now 22 countries have stopped exports and limited food exports.

But whatever happens, thank God and we should be grateful. Indonesia is still growing and stable. Our economic growth, as we have heard from Mr. Governor’s previous statement, is still in the range of 5 percent. When we talk to other heads of state, to presidents, to prime ministers, we are very proud of our economic growth which is still around 5 percent. Although if we look below, I said to Mr. Governor, “Mr. Governor, I have heard from many business players, it seems that money circulation tends to decrease among business players.” It is much likely that too much money is spent to buy government bonds (SBN), Bank Indonesia rupiah securities (SRBI), or Bank Indonesia Foreign Currency Securities (SVBI), so that less money is going into real sectors.

The same thing also happens in our fiscal aspect. Let’s check. Realization of regional governments’ spending is still at 64 percent while there remains only three weeks left of this year. Governors, regents and mayors must pay attention to this. Realization of the central government’s spending is also still at 76 percent. I keep updating myself on data like this almost every day and I always call [relevant officials], but I don’t call Mr. Governor [of Bank Indonesia] because I don’t want to intervene. I will definitely call the Minister of Finance to check out what the conditions are really like. Again, our economic growth is maintained at around 5 percent.

And I urge all banks to be prudent. They must be careful, but please encourage more credit, especially for MSMEs (micro, small and medium enterprises). Don’t let everyone rush to buy what I have told Bank Indonesia earlier, like government bonds (SBN). Although that’s fine too, however, we need to ensure that real sectors can be better than last year.

Let’s compare our economic growth with that of other countries. Our economic growth is in the range of 5 percent, while Malaysia’s, according to the previously received data, is 3.3 percent, United States’ is 2.9 percent, South Korea’s is 1.4 percent, and European Union’s is 0.1 percent. This is what we should be grateful for, because, once again, our economic growth is still around 5 percent. Inflation also tends to remain stable at 2.6 percent. Just be careful with food, especially rice.

What does it mean? We have to be optimistic, but we still have to be alert, we still have to be careful. Be alert to super rapid changes. Changes to technological disruption are also super rapid. Indeed, we must be prudent in our steps, but also not too careful. For example, being too careful to disburse credit will result in very low turnover in real sectors. But most importantly, we have to anticipate all future scenarios. Be quick to respond to any changes. For example, keep checking inflation in the field and resolve any problems quickly.

Then also strengthen the KSSK (the Financial System Stability Committee). Often hold meetings to maintain financial sector stability. Under normal circumstances, maybe it’s okay to hold a meeting every three months in which the Governor of BI, the Chairperson of the OJK, the Head of the LPS meet with the Minister of Finance and the Coordinating Minister for Economic Affairs. But in a situation like this you can’t. At least once a week or once every two weeks, meet up for coffee together, there’s no problem. It doesn’t have to be serious, but you need to exchange numbers and calculations because the current conditions demand us to respond quickly to changing situations.

In addition, we also need a booster and a momentum to maintain growth continuously and if possible, to increase the growth. I think we have a big strategy, in both downstream industry and the green economy. And, this will serve as a national economic driver that will open up jobs and increase existing added value, and of course will support a sustainable economy.

Finally, next year we will hold general elections, the biggest democratic party. But I need to remind you there’s no need to worry. We and our country are experienced in holding general elections not only once or twice, but five times. So it is normal if there will be differences or if the atmosphere turns a bit warm or a bit hot. The difference in choice is also normal. Because we all know that our nation, the Indonesian nation, is a nation that loves peace, unity, and harmony. Let us stand united for an advanced Indonesia.

That concludes my remarks.

I thank you.

Wassalamu’alaikum warahmatullahi wabarakatuh.