Remarks of President of the Republic of Indonesia during the 2022 Bank Indonesia Annual Meeting, at the Assembly Hall of Jakarta Convention Center, Jakarta, November 30, 2022
It is quite hard to make a speech since Governor of Bank Indonesia has said it all. Well, let me just say a word or two.
Assalamu’alaikum warahmatullah wabarakatuh,
May prosperity be upon us all,
Greetings of virtue.
Distinguished Chairpersons and Heads of Institutions;
Distinguished Ministers of the Indonesia Onward Cabinet;
Distinguished Governor of Bank Indonesia and all ranks;
Distinguished Excellencies Ambassadors of Friendly Countries;
Distinguished Head of the Board of Commissioners of the Financial Services Authority (OJK) and Head of the Indonesian Deposit Insurance Corporation (LPS);
Distinguished Governors, Regents, and Mayors in attendance;
Ladies and Gentlemen, Esteemed Guests.
During the meeting with all Heads of States with the world’s largest GDP at the G20 Summit yesterday, I can tell that all of them were confused. I saw wrinkles on their face and more grey hairs. Indeed, it is confirmed that the global situation is uncertain, complicated, incalculable, and unpredictable. No one can figure out the figure. Undefined. That is why all state leaders were confused.
For example, the price of oil. Who can determine the price? I asked big oil producers about it but they could not predict it. It will be more difficult to calculate when the price cap takes effect. Therefore, we all must remain optimistic and stay alert for 2023.
First, export. The value of Indonesia’s exports last year, this year skyrocketed. However, stay alert because it is estimated to experience a decline in the upcoming year since China is experiencing economic slowdown due to zero-COVID policy. The same goes for the European Union. The economic downturn is inevitable. We just have to wait when the recession hits. Also in the United States, the Fed Funds rate continues to rise so it puts the brakes on their economic growth. The US, China, and the EU are our largest export destinations. Therefore, stay alert.
Second, investment. We have earned the trust. But the policy should be followed by proper implementation on the ground. We have earned the trust, formulated the policy, made the structural reform efforts, and issued the Job Creation Law, as well as another in-process law for the financial industry. There may be another health law. All of this has reformed us. The idea of building a new way of working and a new mindset has created trust in us. However, be careful. We still need reformed policies, and need to properly implement them on the ground.
Regarding investment, it is not as simple as that in 2021. Next year’s investment will not be as easy as in 2022 either. In fact, we could even achieve the target of Rp900 trillion last year. InsyaAllah, we can also achieve this year’s target of Rp1.200 trillion. Minister of Investment just informed me that we can achieve it. But next year, the target of Rp1.400 is not a small number because all countries will compete to attract investors.
To that end, I call on all ministries, governors, regents, mayors, to not disrupt capital inflows in terms of investment. Because it is one of the key drivers to our economic growth. In Q3, our economy can grow by 5.72 percent because it is supported by improved investment. But next year, be careful. The target of Rp1.400 trillion will not be easy.
Third, the importance of maintaining household consumption. Our GDP is greatly affected by consumption. We have to change this gradually so that it can affect production. Be careful about the food supply and the energy supply, which we really have to protect so that household consumption continues to grow well, which makes our economic growth in line with the targets we have set.
Back to investment. We must consistently carry out downstream processes. We have established nickel downstream, then move on to bauxite downstream and tin downstream, and other raw materials. This is where the key lies.
Let me take North Maluku as an example. Is Governor of North Maluku present? Stay alert, Governor, stay alert. Be careful, do not play around since North Maluku’s economic growth stands at 27 percent. North Maluku recorded very high economic growth, the world’s highest growth. You do not believe it? Go check it out. Which province has a 27 percent of economic growth rate? How could it happen? Because of downstreaming. There is a smelter industry there, which will grow again later if the smelter and the industry of nickel derivatives can all be processed in North Maluku. Therefore, I remind you to be careful, not in a bad way. It is all good already, but just stay alert.
And what’s even better in North Maluku is that when I went to Ternate a month ago, I checked the market prices remained very stable. I checked through Bank Indonesia regarding inflation in North Maluku. It stood at 3.3 percent. How can the people of the province be happy about that? The inflation rate stood at 3.3 percent, while the economic growth stood at 27 percent. Thus, I remind the Governor to not formulate bad policies that may disrupt the investment. I just read a survey of provincial economic growth. North Maluku is the happiest of them all. I was not upset since the growth reached 27 percent with inflation rate of 3.3 percent. It is because the Governor himself is an ustad (Islamic preacher), so he is so calm and talks less, but the growth reached 27 percent all of a sudden.
What does it mean? The infrastructure that we have built outside Java has brought a major impact on new economic growth points outside Java. The infrastructure that we have built has added new economic growth points outside Java. Mandalika has become a new economic growth point for tourism sector. Labuan Bajo has also become a new economic growth point for tourism. If things return to normal and the policies in East Nusa Tenggara have right direction, Labuan Bajo will become a new economic growth point. The same goes for Morowali. It will be a point of economic growth for our country.
I have been also informed that regions outside Java recorded higher investment value than that in Java Island. The figure normally stood at 70:30, 70 for Java and 30 for regions outside Java. Today, Java and regions outside Java are both contributing 53 percent of investment value. This is the success of building infrastructure that was followed by growing new economic growth points and investment towards regions outside Java.
That concludes my remarks because the Governor has conveyed it all earlier. We all must remain optimistic and stay alert for next year. We have to remain vigilant in formulating policies. Fiscal and monetary policies must synergize so all national economic policies will provide great benefits to the people and the country.
Wassalamu’alaikum warahmatullahi wabarakatuh. (RIF/MUR)