With its
large domestic market, stable economic fundamentals and sustainable economic
growth, Indonesia has reached the same economic standard of the so-called BRIC
countries, according to Trade Minister Gita Wirjawan.
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| Trade Minister Gita Wirjawan |
Speaking
during a panel discussion at the annual gathering of the World Economic Forum
(WEF) in Davos, Switzerland, on Thursday, Gita said that Indonesia did not want
a status that it did not deserve.
But with
its latest economic performance, the country had reached the same economic
standards as the BRIC countries of Brazil, Russia, India and China, Gita told
the forum.
He said
that Indonesia and the BRIC countries, which contributed more than 20 per cent
to the world economy, played an important role in coping with the global
economic slowdown. These countries should, therefore, be able to maintain their
economic growth so that the world would no longer rely on industrialised
nations such as the US or European countries.
Gita also
acknowledged that corruption would remain a problem in bringing Indonesia to a
higher economic level. But he said awareness among the government and people on
the need to eliminate corruption was quite high.
Low
salaries remained a major problem in fighting corruption in the state
bureaucracy, he said. “It is, therefore, important to provide fiscal space to
support a more conducive democracy for well-distributed and sustainable
welfare,” he said. “I am quite sure, in the next few years, Indonesia will see
less corruption,”
he said.
The trade
minister also acknowledged that the development of infrastructure could be
taken forward quickly in the more democratic Indonesia, as the people had more
say in determining, for example, the location of projects.
However, he
said that political reform would create a positive economic impact in the long
term.
The WEF
founder and executive chairman, Klaus Schwab, opened the World Economic Forum
Annual Meeting 2013, which is taking place from Jan. 23 to 27, under the theme
“Resilient Dynamism”.
More than
2,500 participants from over 100 countries, including nearly 50 heads of state
or government, 1,500 business leaders, and representatives from civil society,
media, academia and the arts, are taking part in the forum.
Gita said
with its strong domestic consumption, Indonesia — with a population of 237
million — had become one of the fastest-growing economies in the world.
The
Indonesian government has been able to maintain low inflation and sustainable
economic growth of above 6 per cent in the past several years. With its strong
economic credentials, the largest economy in Southeast Asia has successfully
evaded the global economic slowdown that has hit the globe since 2008.
McKinsey
& Co. predicts that Indonesia will be the seventh-largest economy in the
world and will add 90 million people to its middle class by 2030. There are 45
million middle-class Indonesians today, and the country ranks as the 16th
largest economy in the world.
Gita said
that domestic consumption and investment remained the main drivers of the
Indonesian economy as exports showed no significant growth during the last two
years. But he added that with the signs of recovery in major trading partners
such as China, the contribution of Indonesia’s exports to Gross Domestic
Product would be higher.
In addition
to Gita, the chairman of the Indonesian Investment Coordinating Board, Chatib
Basri, and Tourism and Creative Economy Minister Mari Elka Pangestu, one of
candidates to succeed Pascal Lamy — the director general of the World Trade
Organisation — also took part in the WEF annual meeting.