Jakarta – Josua Pardede, the chief economist at Bank Permata, has emphasized the crucial role of structural transformation in driving Indonesia’s economic growth above five percent per year. This statement comes in the context of recent economic data and the country’s long-term development goals.
According to Antara News Agency, who shared his insights on Tuesday, structural transformation is vital for Indonesia to reach its 2045 target of becoming a developed country. He referred to the recent data released by Statistics Indonesia (BPS), which showed that Indonesia’s economy grew by 4.94 percent in the third quarter of 2023.
Pardede underscored the importance of accelerating structural transformation, which involves transitioning from a traditional economic structure characterized by low productivity to one with higher productivity. This transformation can be facilitated through the application of modern technology, infrastructure development, and a shift in policy orientation, among other factors.
From the domestic perspective, Pardede observed that various improvements are being made, suggesting that the Indonesian economy is on the right track. However, he also pointed out the challenges posed by global economic integration, including the volatility, uncertainty, complexity, and ambiguity (VUCA) often experienced in the current global economic climate.
In response to these challenges, Pardede advised that the government should balance its focus on growth with a strong emphasis on stability. He argued that structural transformation is increasingly critical in addressing the VUCA phenomenon.
Highlighting Indonesia’s demographic dividend, Pardede suggested that the country has significant opportunities. He believes that if the transformation can be achieved with an educated workforce, it will substantially contribute to economic growth.
A domestic challenge Pardede mentioned is the sustainability of structural transformation policies, given the political inclination towards short-term policies. He emphasized the need for a long-term perspective, stating, “Structural transformation cannot be carried out in the short term. In fact, this is quite important to provide a foundation for the future, so that the economy can be accelerated.”
Pardede’s analysis points to the importance of strategic and sustained efforts in structural transformation as a key driver for Indonesia’s economic acceleration and development.