Remarks of President of the Republic of Indonesia at the Opening of the 2022 National Development Planning Conference (Musrenbangnas), at the State Palace, Jakarta, April 28, 2022
Assalamu’alaikum warahmatullahi wabarakatuh,
May peace be upon us all,
Greetings of virtue.
Honorable Vice President;
Distinguished Heads of State Institutions;
Distinguished Ministers of the Indonesia Onward Cabinet, Governors, Regents, and Mayors from all corners of the country;
Distinguished Heads of the Provincial Development Planning Agency (Bappeda);
Distinguished Attendees of the National Development Planning Conference (Musrenbangnas);
Ladies and Gentlemen.
We will face difficult and tough situation this year and next year. Economic and political situation experiences turmoil and is full of uncertainties. The pandemic is not completely over yet; some countries are still struggling to tackle the spread of COVID-19 and imposing a lockdown. At the same time, disruption on global supply chain has affected many aspects. Not to mention a war between Russia and Ukraine has triggered energy and food crisis that eventually led to a sharp global inflation and a global economic slowdown. To date, inflation rate in Turkey hit an all-time high at 61.1 percent. The rate in the United Stated, which is usually under one percent, has surged to 8.5 percent. Thank God, the rate in our country only reached 2.6 percent. We must work together to improve and maintain the rate.
I give you the overall picture so we can remain vigilant, make a detailed calculation, and take effective anticipatory measures. Everyone, we must have a sense of crisis. Let us not work in a ‘business-as-usual’ mode. Be careful, we must all have a sense of crisis, so we must have good planning, we must have the right scenario in facing this uncertain situation.
Amid the turmoil, we should be grateful that Indonesia’s economy has shown a positive trend and a surplus trade. In February, it was at [US$]3.82 billion and in March, it was at [US$]4.5 billion. This is excellent. Credit growth increased in February to 6.33 from 5.79 in January. It also reflected an improving trend. In addition, the manufacturing purchasing manager index (PMI) in March also improved to 51.3 compared to the result of last month which was at 51.2. Real sales index is above normal which was at 14.5 percent in March. The consumer confidence index (CCI) is also already above normal. I think we must maintain that figure. We also need to maintain the moment of a positive trend in economic growth. In harmony with the theme of the 2023 Government Work Plan (RKP), we must work hard to increase productivity for an inclusive and sustainable economic growth.
Ladies and Gentlemen,
In a bid to respond to the global economic turmoil, I would like to underscore several points of note to be used as a common reference.
First, this is my second time telling you that we must focus to increase the domestic component requirement (TKDN) by using the potential for goods and capital expenditures to buy domestic products.
I remind you once again that the potential spending on goods and capital and services value at the Central Government is Rp526 trillion, (while) in the regions is Rp535 trillion. It means, the total has reached Rp1,062 trillion plus SOEs of Rp420 trillion. This is a huge number. We cannot let this huge budget used to buy imported goods since it will cause domestic production stagnant. Shift the purchase to local products. Limit/scrap import products as much as possible while at the same time arrange national production capacity and encourage policy-making in favor of the import substitution industry which manufactured products that meet domestic needs. For instance, if we are still importing corn, we must plant it. Why? If corn can be planted on various soils, why must we import it? We are still importing soybean as well though many regions are suitable for soy farming. We must also provide assistance for MSMEs to scale up and meet the global standards, international standards.
Second, accelerate downstreaming industries to be carried out domestically. Encourage the mining-rich regions to build smelters immediately. For cacao- or coffee-producing regions, encourage them to join the industry, to create added value and provide job opportunities for the people. Let me reiterate once more; we should not be a mere raw material exporting country. It must be stopped.
Third, increase productivity and self-reliance in the food and energy sectors. We must always remember that future global issues are food and energy. They are very crucial in the future and Indonesia has the potential in both. Therefore, once again, do increase our productivity and self-reliance in the food and energy sectors. Focus on doing it in a massive scale. Monitor it so it can be well implemented.
Fourth, increase the investment so it would create as many jobs as possible. We are competing with other countries. If business licensing process at the Central Government and regional governments is not fast enough, then simplify and accelerate it. Provide services to all investment-related process since we can no longer depend on the State Budget and the Regional Budget. We have to be careful about this. Therefore, we must be creative in finding new innovative sources of financing by continuously improving the ease of doing business and attractiveness of investment.
Fifth, we will start imposing a regulation on a deficit below three percent of gross domestic product (GDP) next year. Thus, we must make the plan thoroughly, in a detailed and precise manner. Enhance the expenditure to improve the quality. Optimize our tax revenue.
Sixth, its strategic agendas to improve human capital’s quality must continue to be made. We must also speed up reduction of extreme poverty and stunting rate. Improving the quality of human capital through transformation in the health sector, increasing access to and quality of education, as well as up-skilling and re-skilling the workforce so they can be more productive and competitive.
Seventh, we must prepare for the upcoming general elections, which will kick off in June 2022. I urge all ministries/agencies and local governments at the provincial, regency, and municipality levels to support the General Elections Commission (KPU) and the General Elections Supervisory Body (Bawaslu) in carrying out their tasks. This includes, certainly, budget support from the State Budget and the Regional Budget so that the elections can be held in a proper and smooth manner.
That concludes my remarks on this auspicious occasion. By saying bismillahirrahmanirrahim, I hereby open the 2022 National Development Planning Conference on the Government Work Plan.
I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.