Remarks of President of the Republic of Indonesia at Indonesia’s Economic Outlook event at the Astor Ballroom of the ST Regis Hotel, South Jakarta, DKI Jakarta Province, December 22, 2023
Assalamu’alaikum warahmatullahi wabarakatuh,
May prosperity be upon us all,
Greetings of Virtue.
Distinguished Ministers of the Indonesia Onward Cabinet;
Distinguished Excellencies Ambassadors of Friendly Countries;
Distinguished Speakers and Members of the House of Representatives (DPR) of the Republic of Indonesia, Officials of the Supreme Audit Agency (BPK);
Ladies and Gentlemen, Esteemed Guests.
Guiding our nation, Indonesia, through the currents of global economic uncertainty is a challenging endeavor. We aim for better economic growth, but it’s crucial to proceed with caution. Expansion is welcomed, yet it should be coupled with thorough and thoughtful calculations.
When I had a meeting with Managing Director of the IMF, I have often highlighted that 96 countries became patients. The Islamic Development Bank (IDB) consists of 57 member countries, with 32 of them facing particularly challenging fiscal and financial economic conditions. However, as we step into 2024, we have every reason to be optimistic. I see 2024 as a year that must be filled with optimism. Coordinating Minister for Economic Affairs presented the figures. Why? Because we have the capital to be optimistic, both economically and politically.
First, economic factors. We know that throughout the quarter of 2023, the Indonesia’s economy will maintain a growth rate of around 5 percent, higher than that of the global average, which only grew by 2.9 percent, we should be grateful for this, alhamdulillah. Regarding inflation, we should be grateful for maintaining it at 2.86 percent, a task that proves challenging for many other countries, which is significantly below the global inflation average of around 7.2 percent, we stand at 2.86 percent.
Other indicators are positive as well. Labor absorption increased by 4.5 million people from August 2022 to August 2023. The manufacturing PMI in November 2023 remained at an expansionary level of 51.7. The trade balance has been in surplus for 43 consecutive months. The consumer confidence index in November was also at 123.6. This reflects strong confidence in our economic condition. Why is everyone so quiet? Let’s be optimistic, be optimistic, be optimistic. What’s wrong? We’re here to express optimism, yet everyone is quiet. Once again, there is no reason to be pessimistic entering 2024. I remain optimistic that our economic growth will hover around 5 percent. As the Javanese saying goes, ‘stay alert and be vigilant.’ It is crucial to always bear in mind the importance of being cautious and alert. With the ongoing global uncertainty and the potential for conflicts in the Middle East that could lead to a surge in global oil prices. However, Minister of Finance has informed me, “Sir, it seems like oil prices will no longer fluctuate,” We should be thankful for that.
The volatility of commodity prices, especially in food, is something we need to be cautious about. I still have some concerns about food commodities because during the super El Nino, our rice production slightly declined. In 2024, it is also estimated that we still won’t fully recover. However, looking at global condition, 22 countries have halted food exports, and some have reduced their food exports. Therefore, in 2023, we faced difficulties in securing additional rice reserves. But for 2024, alhamdulillah, Head of the State Logistics Agency (Bulog) who just returned from India informed me saying, “Sir, I have signed for one million tons stock,”.
Also, when I attended the ASEAN-Japan Summit in Tokyo, I met with Prime Minister Thavisin of Thailand. During our discussion, I learned that there was stock available there. In the holding room, I expressed my interest in importing the stock from Thailand. I informed him that Indonesia needed 2 million tons. He promptly called his team in Thailand that afternoon and later said, “President Jokowi, Thailand is ready to send 2 million tons to Indonesia.’ But, let’s not take credit for it as it’s an import,”. If it’s our own production, we’ll applaud it. But to secure our strategic food security reserves, we must do that. This means that we have secured one million tons from India and two million tons from Thailand. At least we feel safe about our food reserves.
We also have to anticipate the weakening of China’s economy, which is Indonesia’s main trading partner, this is very important. Additionally, the tightening of monetary policy in the United States has suppressed capital flows in developing countries and affected the stability of the financial sector.
Therefore, it is crucial to stay consistent in our efforts, adopt sustainable practices, and foster synergy between the Government and the private sector. We need to attract both domestic and foreign investments continuously. Investment should not only come from large corporations but also from small businesses. However, it’s not just about any investment; our focus should be on investments that bring significant added value to our country, which includes investments in various key sectors such as minerals, agriculture, fisheries, marine, and plantations. Additionally, we must also concentrate on fortifying the digital economy, promoting the green economy, and enhancing the blue economy.
Ladies and Gentlemen,
I sense this optimism resonating across the country. Just yesterday, I visited Indonesia’s New Capital of Nusantara (IKN). The development is not solely in the government’s domain, it’s thriving in the private sector. Witnessing the rapid growth, I conducted several groundbreakings for new constructions and assessed the construction progress. It’s remarkable to see the advancements since I laid the first stone three months ago.
What is encouraging and creates optimism is the significant enthusiasm exhibited by our private entrepreneurs. Presently, 13 substantial private projects have commenced construction, amounting to an overall project value of approximately Rp41 trillion. This includes the development of six private hospitals, international schools, universities, a sports center, apartments, offices, seven 5-star hotels, and four entertainment venues, among other initiatives.
Once again, I am optimistic, not only about the development of IKN but also about the confidence within our business community and the private sector to drive our national economy forward into 2024.
Ladies and Gentlemen,
My optimism for 2024 is also grounded in political conditions. I understand that many businessmen are awaiting the political situation, and some may feel nervous as we approach the election, especially the presidential election. However, I want to emphasize that there is no need to worry. Despite the intense atmosphere on social media and in political debates, the overall situation remains stable. However, when you visit the communities, travel to the regions, and explore the villages, you’ll notice that people are relatively relaxed. It’s true. If you go to the villages and local areas, you’ll find that people are just going about their daily lives. The political climate is different, especially when compared to 2014 and 2019. It indicates that our society has matured politically. Even when things get heated, they can cool down quickly, and if there’s any division, it can be mended.
I conclude my remarks on this auspicious occasion.
In conclusion, the economic outlook for Indonesia in 2024 is highly optimistic. This optimism is grounded in the positive trends we observe in our economic performance and the favorable political climate leading up to the 2024 elections. The key to our success lies in unwavering dedication, collaborative efforts between the government and the private sector, and a commitment to sustainable practices.
I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.