Remarks of President of the Republic of Indonesia at the Opening of the 2022 National Board Meeting of the Indonesian Chamber of Commerce and Industry (Kadin), at Flores Ballroom, Borobudur Hotel, Jakarta, December 2, 2022
Assalamu’laikum warahmatullahi wabarakatuh,
May peace be upon us all,
Greetings of virtue.
Distinguished Chairperson of the Indonesian Chamber of Commerce and Industry (Kadin) and members, and Chairperson of Provincial Chamber of Commerce and Industry,
Distinguished participants of the National Board Meeting,
Distinguished Coordinating Ministers, and Ministers in attendance,
Ladies and Gentlemen,
When I step up to this podium, I saw a yellow line; there is also a yellow line in the underneath. I took a close look, and saw yellow sea. I just realized that the Chairperson of Golkar Party is present.
Distinguished Ladies and Gentlemen,
I don’t want to say something that will make us pessimistic. I don’t want to hear that the world is facing this, experiencing that, anymore. In fact, it did happen, but I don’t want to mention about it anymore. I just want to tell you something optimistic. It is because IMF Managing Director has made a statement that Indonesia is a bright spot amid the economic gloom. Do remain vigilant. Amid the global economic gloom, Indonesia is a bright spot, she told that. What was the reason? She considered the statistics.
Let’s take a look at our inflation rate; it is maintained at 5.7 percent. The rest of the world was at 10-12 percent. In fact, there is also country that reaches more than 80 percent. Why did we become pessimistic if we gained such rate? We should be optimistic instead. In term of economic growth, Indonesia is managed to grow 5.72 percent in the third quarter of 2022. Global economic growth is projected at 3.2 percent in 2022. We managed to grow 5.72 percent. Why are we not optimistic by that rate? We must be optimistic.
Indonesia’s economic growth also shows a positive trend and is managed to grow 5.72 percent in the third quarter of 2022, which is above the global economic growth that is projected at 3.2 percent in 2022.
Our Purchasing Managers’ Index is also recorded an expansive level. All states experienced contraction, a reading of below 50. As far as I know, out latest figure is still at 51.8, above 50 percent. Why are we not optimistic by that expansive level? We must be optimistic. We must take a close look at the rate.
Regarding trade balance, our trade balance also recorded a surplus for 30 consecutive months after having been showing negative results. For 30 consecutive months, since May 2020. It means our export higher than import value. Why are we not optimistic? We must be optimistic.
It is really difficult to maintain current account. In 2019, our current account deficit is US$30 billion, minus 2.7. Now, we received surplus of US$4.4 billion and positive 1.3. Once again, why are we not optimistic considering the outstanding figure? We must be optimistic. No one should say something pessimistic. Read those figures, we must be optimistic. I don’t want to talk about the global situation or other countries. If we reflect to that situation, we can be pessimistic.
The country has abundant future potential and capital that other countries do not have. Let’s see, we can make a huge leap if we share one common vision: the 2045 Golden Indonesia. Talking about our strength, Indonesia is the fourth most populous country in the world with 278 million people; this is a very large market, then we will talk about ourselves, Indonesia. If we consider our neighbor region, ASEAN has 600 million [population]. This is a very large market. This is our strength, which we often don’t realize, we often forget, so that other countries took our market. Stop it. We must protect our market, so that we can use it to make a leap. The market comes first.
Second is the geographical aspect. We don’t realize that we are situated in the global trade routes which are, certainly, very profitable for Indonesian products. That was the second point.
Third is the natural resources. We have everything.
Fourth is our demographic bonus. In 2030, our productive work force will reach 201 million people. In addition, we will have very large middle class.
We must make the best use of it. Do something about our great strength and potential. Not to mention there is one thing that is hard to be gained, international trust. I guess Chairperson of Kadin already felt the positive energy during B20 [Summit]. In the previous couple of days, I received three delegates and they asked me about energy transition, digital transformation, our green economy, and our EV battery program. We must realize our own strength.
Therefore, I have mentioned it several times that we are planning to build one huge ecosystem, not minor projects. There are projects in Morowali, projects in Batang, but that is not our intention. We want to build one huge ecosystem, for example, EV battery ecosystem for electric cars and electric motorcycles. What do we not have? To reach that goal, we have nickel, we have copper, we have bauxite, we have tin, what we don’t have is only lithium. What we don’t have is lithium, because we have also explored the graphite in Morowali. The only thing we don’t have is lithium. Where could we find this item? In Australia.
During B20 [Summit], I told Prime Minister Albanese [PM Australia] that we must create a cooperation. To my surprise, there is Indonesian citizen who owns a mining site there. Indonesians are smarts; they have bought the site long before that event. I should give a thumb up to them for seeing this opportunity. It’s remarkable.
The challenge is to integrate that products; it’s really hard. Nickel is located in Morowali, Weda Bay and other different locations. Copper is in Papua and Sumbawa. Bauxite is in West Kalimantan and Bintan. Tin is in Bangka Belitung. The hardest thing to do and we have not done it yet is to integrate all of it into one huge ecosystem. We have never done it. Each project runs separately so we do not have huge value added. Consequently, we were used by other countries.
Let me recite an example of copper that the mini is located in Papua but the smelters are located in Japan and Spain since 50 years ago. What did we gain? We just let it be. What do regional entrepreneurs obtain? What can our SMEs do? This is a big thing. We will develop it into a huge ecosystem, and to integrate it if necessary. I will try my hardest to integrate it so our country can make a leap towards a new civilization.
If we have created the battery industry as I told you earlier in the morning. If we have created the EV battery, we will make a direct straight line. Pak Arsyad does not have to market the investment anymore. Minister of Investment, Pak Bahlil, does not have to look for investors. People will come to Indonesia, trust me. It is because we have the huge ecosystem. I calculated that 60 percent of EV battery production will be produced in Indonesia. We have it in Indonesia, trust me. Thus, anyone who wants to develop electric cars, electric vehicle, and electric motorcycles will come here since it will be more efficient. We have all the things needed. We have copper, the bauxite, for the chassis, for the car, for the fuselage; it’s all here.
In addition, another supporting factor is our potential in green energy, renewable energy to ensure that we produce premium product. That is what people come to us. We don’t quite realize that we’re on top of the global leadership in the economic sector. We have gained trust; don’t miss this momentum. I am delighted if the Kadin draws up a road map on human resources, textile industry, metal industry. All industries will have roadmaps in order to affirm our objectives and visions.
This will attract and drive our national economy. This will become a main locomotive that attracts regional entrepreneurs, MSMEs [micro, small, and medium-sized enterprises], and others. Most importantly, it will generate value added.
I have told this many times that nickel which used to be exported in raw materials only generated US$1.1 billion or equals to Rp18 trillion. Now, it increased to more than Rp320 trillion, 18 times higher [than previous figure]. That’s only from processing of raw nickel into stainless steel, we have not talked about EV battery, cars, or plane. We have the industry. I have no idea how much value added we can obtain.
That concludes my remarks. By saying bismillahirrahmanirrahim, I hereby declare the 2022 Kadin National Board Meeting open.
I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.