Remarks of President of the Republic of Indonesia at the Inauguration of National Gathering of Indonesian Army Retirees Association (PPAD), Sentul International Conference Center, Bogor Regency, West Java Province, August 5, 2022
Assalamu’alaikum warahmatullahi wabarakatuh,
May prosperity be upon us all,
Greetings of virtue.
Distinguished 6th Vice President of the Republic of Indonesia, Indonesian Defence Forces (TNI) General (Ret.) Try Soetrisno;
Distinguished Chief of TNI and Indonesian Police Retirees and Widows (Pepabri) General (Ret.) Agum Gumelar;
Distinguished Chief of Veterans’ Legion of Indonesia (LVRI) Major General Saiful Sulun;
Distinguished seniors, former TNI commanders, former Chiefs of Staff of the Indonesian Army;
Distinguished Chief of Staff of the Indonesian Army;
Distinguished Chairman of the Indonesian Army Retirees Association (PPAD) TNI Lieutenant General (Ret.) Doni Monardo, all the seniors;
Distinguished National Gathering participants and the big family of the Indonesian Army;
Distinguished Ministers of the Indonesian Onward Cabinet, Chairman of the Chamber of Commerce and Industry;
Ladies and Gentlemen,
I am aware that the dedication shown by the retirees never ceases. During the term of office as Indonesian Miltary members, you always gave the best of your service, and even after retiring, you always keep our beloved country in your heart and mind. Therefore, on behalf of the people and the Government, I would like to extend my highest appreciation to you.
I’d probably say something different. We all know that the world is currently in an uneasy position, a very tough situation. I recently met with Secretary-General of the United Nations Antonio Guterres, heads of international institutions, and G7 Heads of State. I asked them where this world is heading to. They said, “President Jokowi, this year, we will be in extremely difficult situation. “And then, what will it be like? “Next year, it will be dark.”
It is not Indonesia, it is the entire world. We are talking about the entire world, and all countries are currently in an uneasy situation. The UN Secretary-General, the IMF, and the World Bank said that 60 countries’ economies will collapse, and one by one has started to fall. They have meticulously calculated the numbers. First, there will be 9 countries, and then, 25 countries, and then, followed by 42 countries. What we have concerned about is what we actually see. Currently, 320 million people worldwide are suffering from acute hunger, and some of them have begun to starve. I am telling you what it is. It is because the current economic growth position is not only decreasing, but it is dropping.
Singapore, Europe, Australia, USA, all countries. Their economies are dwindling, while the inflation rate increases, all commodities’ price surges. This condition is very, if I may say, the world is currently in a distressing condition. America, which usually faces price increase or inflation of one percent, one percent, today it is at the rate of 9.1 percent. Gasoline’s price has doubled. It is the same as in Europe.
Can you imagine? In our country, if Pertalite gasoline’s price rises from its current price Rp7,650 to Rp17,100, how many months the demonstration will be held? I recall the demo lasted for three months when it increased by 10 percent. How many months will the demo last if it reaches more than 100 percent? This is what the Government is trying to control. How? With the subsidy, because once the gas price rises, the commodities’ price is also going to surge. Consequently, the Government provides a subsidy budget in a large amount of Rp502 trillion. No other country has the courage to provide that much as has been done by Indonesia.
Let us move on to what we have done to compete with other countries. To compete with other countries, we need to prepare and build the foundation, because in the future, it is not about big countries that will defeat small countries, or rich countries that will defeat poor countries. No. The competition is about countries with fast progress will defeat countries with slow progress. To progress fastly, we need foundations. This is what we are working on.
First, infrastructure. It will have an effect in five or ten years; we cannot feel the effect right now. However, once we compete with other countries, it will be obvious whether we can compete or not based on the infrastructure we have.
In the last seven years, we have built 2,042 kilometers of toll roads, 5,500 non-toll roads, 16 new airports, 18 new ports, 38 new dams, and 1.1 million hectares of irrigation channels. These are our foundation for competing with other countries. Maybe, we cannot feel the effect instantly, but it will bring eventually effect to the State Budget.
Second, this is something we did not dare to do for so long, which is downstreaming, or industrialization. Since the VOC era, we had been exporting raw materials, because it is easy. Raw coal, nickel, and copper were mined and then exported. Freeport also exported raw materials. We had been enjoying it for so long that we forgot to set the foundation for industrialization.
For instance, nickel. We have been exporting raw nickel for years. In 2014, I remember the value was up to USD1.1 billion, or around Rp15 trillion per year for raw nickel export. When we stopped exporting raw nickel in 2017, our exports in 2021 exceeded more than Rp300 trillion. From Rp15 trillion surged to Rp300 trillion, only from one commodity. However, we were sued by the European Union and [the case] was brought to WTO. I told them, “You may sue us, I will face it, Indonesia will face it.”
Until now, the lawsuit has not been settled yet, because we also provide fair reasons. It is our own nickel, why is the EU suing us? Because their steel industry cannot run without raw materials, the industry shifted to Indonesia.
What happens when we industrialize? First, the Government’s tax income will rise. Initially, we got the tax from Rp15 trillion transaction, and then, we could get the tax from Rp300 trillion transaction. How much it increased? Twenty times more. It has created many job opportunities in Indonesia, not in the European Union. This is something we had not thought about for a long time, and we did not dare to stop it.
After nickel, although it has not been settled yet in the WTO, we maybe will stop raw tin or bauxite exports this year. The State-Owned Enterprises will carry out the manufacture, cooperating with private sector. If the State-Owned Enterprises and private sector are not ready yet with the technology, then it is fine to seek partners. Foreign partners for technology transfer is fine, why we oppose to it? But the factory, the industry, is in the country.
For years, I have ordered Freeport to build a smelter, but they never did. However, when 51 percent of Freeport owned by the State-Owned Enterprises and it became ours, last year, I ordered to build a smelter, they built it immediately. Since it became ours, the majority was ours, the smelter was built immediately in Gresik. We will see how many billions we will get from the smelting of the copper; we do not know yet. However, I believe it can increase over 20 times from the initial export number.
Sometimes, we sent not only copper, we sent the raw materials which could contain gold as well, we never knew. When the smelter is completed, we will know. For more than forty years, we were probably lied to. It probably contained more gold than copper. But I cannot say any further because production in our smelter has not begun yet. Stop copper export, stop bauxite export. This will contribute to the growth of our economy and create many job opportunities.
Third, digitilization. If we want to compete, micro, small, and medium enterprises must take the chance of entering the digital platform. There are 65.4 million MSMEs and they contribute to our GDP and our 61 percent economic growth. Do not overlook them. Therefore, we will continue to encourage them to enter the digital ecosystem. MSMEs will eventually become the strong foundation of the Indonesian economy. Not the big ones.
Our current economic GDP is at number 15. I believe that in 2030, insya Allah, we will be in the seventh place globally. Based on calculations, Ministry of National Development Planning (Bappenas)’s calculation, McKinsey’s calculation. In 2045, our economy will be in the fourth position globally, if we are consistent and continue to do the works related to downstreaming.
Then, what? If we have good economic growth and good GDP, in 2030, it is expected to be three times from current GDP. From US$1.2-1.3 trillion to more than US$3 trillion. Then, what? Our state budget will be bigger. Then, what? The budget allocation for salaries and pensions will also increase. But wait until 2030.
Hold on, I was telling you a joke. I was telling you what Pak Doni Monardo has told me. I know that the pension for the lower-ranking enlisted officers is Rp2.6 million, right? For the higher-ranking enlisted officers is Rp3.5 million, right? And, for the non-commissioned officers, the captains, is Rp4.1 million, right? I know, I know, particularly for those who live in Jakarta the greater area, it is not enough. The Government has given the religious holiday allowance (THR) and also the 13th salary. But I know it is still not enough.
I cannot promise you, I said that our State Budget is not in an easy position. However, after attending this event, I will call my Minister of Finance and make calculation. If the calculation is already final, I will let you all know about it.
I think I conclude my remarks at this opportune moment. And by saying bismillahirrahmanirrahim, today, I inaugurate the National Gathering of Indonesian Army Retirees Association (PPAD) 2022.
Wassalamu’alaikum warahmatullahi wabarakatuh.