Remarks of President of the Republic of Indonesia at the Inauguration of the 2021 National Coordination Meeting on Inflation Control, 25 August 2021 State Palace, Special Capital Region of Jakarta
Assalamu’alaikum warahmatullahi wabarakatuh,
May peace be upon us all,
Greetings of virtue.
Distinguished Head of the Audit Board of the Republic of Indonesia,
Distinguished Ministers of the Indonesia Onward Cabinet,
Distinguished Governor of Bank Indonesia
Distinguished Head of the Financial Services Authority,
Distinguished Governors-Vice Governors, Regents-Vice Regents, and Mayors-Vice Mayors who are present,
All Regional Inflation Control Teams across Indonesia,
Ladies and Gentlemen.
We must be grateful because amid uncertainties, our national economy is improving. However, we must remain vigilant. And thank God, in the second quarter of 2021, our (national economy) was able to grow by 7.07 percent (year-on-year/YoY) with controlled inflation rate at 1.52 percent (YoY).
The inflation rate is much below the 2021 inflation target, which is 3 percent. Nevertheless, we are also aware that low inflation can be unpleasant as it can indicate the people’s decreasing purchasing power due to activity and mobility restrictions.
In the third quarter of 2021, we must also remain vigilant. We must remain careful to strike a balance between health and economy. We must continue to control the gas and brake of COVID-19 transmission. We must be able to control it and protect vulnerable groups. The people’s purchasing power must continue to increase. It will boost demand and supply. It can also move the economy.
Ladies and Gentlemen,
On this occasion, I would also underscore several things to which the Central Inflation Control Team (TPIP) and the Regional Inflation Control Teams (TPID) should pay attention.
First, maintain supply availability and price stability, especially basic necessities. With the people’s decreasing purchasing power, stability of food prices is vital to our people. Therefore, if there is any on-the-ground obstacle, we must overcome it. We need to take more measures on the ground in terms of (overcoming) production obstacles or distribution obstacles. Every city must monitor the condition on the ground, whether there are production obstacles, whether there are distribution obstacles.
Second, I order the TPIP and TPID to not only focus on controlling inflation but also to be proactive in improving the economic sector to grow more productively, in assisting to boost farmers’ and fishers’ productivity, in strengthening the MSME sector to be able to survive and level up.
Third, we must make the most the pandemic to increase added value of agriculture sector because amid the COVID-19 pandemic, the sector has become the top sector that can continue to be productive and involve many workers. Thank God, in the first quarter of 2021, agriculture sector was able to make a positive growth. We must be grateful. It grew by 2.95 percent. And in the second quarter, it grew positively again by 0.38 percent. I am certain that, God willing, in the third quarter, agriculture sector can still grow higher because the market potential remains huge, both domestic and export.
We are aware that in the first semester of 2021, from January to June 2021, export of agriculture products reached Rp282 trillion or US$1.95 billion, 4.05 percent, compared to that in the same period in 2020 at only Rp247 trillion or US$1.71 billion. There are still many potential export commodities that we must continue to tap. For example, last week I saw that konjac can become a new commodity that gives added value to farmers. There are also other commodities, such as swiftlet nests, edamame, and many other horticultural products.
I noticed that in the field—as what I have stated about konjac, I believe that it will be very promising in the future. The market is still huge. However, I order that this konjac commodity be used to produce consumer goods, be it cosmetics, rice, or other food.
We carry out this duty seriously, not only to enhance Farmers’ Exchange Rate (NTP) and farmers’ welfare but also to take a leap so that the agriculture sector has bigger contribution to moving the economy.
Everything must be prepared from upstream to downstream. Farmer institutions in this cluster model need to be strengthened. Farmer-owned enterprises, be it cooperatives or village-owned enterprises, need to be constantly developed to continue to increase the added value of this post-harvest products. Market access must be expanded by establishing partnerships with industry. Access to financing must also be facilitated and simplified.
In terms of financing, the Government will continue to speed up people’s business credit (KUR) distribution, especially Agriculture KUR with an allocated budget of Rp70 trillion in 2021, special for Agriculture KUR out of the total KUR of Rp253 trillion. The KUR distribution scheme will continue to be perfected to adapt to the characteristics of the existing businesses in the agriculture sector.
KUR requirements must also continue to be simplified. KUR must also be able to be used to increase the added value of post-harvest products, such as for rice milling unit procurement so farmers can benefit more from KUR.
Furthermore, I also order the Ministers, Heads of State Institutions, and regional heads to improve assistance for farmers. Do make use of technology, including digital platforms, to boost farmers’ productivity and shorten the marketing chain of MSMEs in the food sector.
That concludes my speech on this auspicious occasion and by saying bismillahirrahmanirrahim I hereby declare the 2021 National Coordination Meeting on Inflation Control this morning open. (DH/EP)