“We can easily achieve a growth rate of 8 per cent and I am determined to go beyond 8 per cent within two or three years”
In a recent interview at the Qatar Economic Forum 2024 to Haslinda Amina, Chief International Correspondent, South East Asia, and Anchor, Bloomberg Television, H.E. Prabowo Subianto, Minister of Defence and President-Elect, Republic of Indonesia, discussed Indonesia’s strategic approach to driving economic growth and realising its vision for the future.The country has already announced that it aims to become the fifth largest economy by 2045. Outlining the major focus of his economic policy, the President-Elect said that self-sufficiency in food and energy to ensure food and energy security will be major priority areas; in the case of energy, he also said that there would be a major shift to renewable energy sources, particularly to the use of biofuels. The other major focus areas he spelt out are poverty reduction, industrialisation with an emphasis on moving towards higher value addition particularly in industries where Indonesia is currently a raw material producer, improved education and healthcare, and employment generation. Excerpts from the interview …
On growth and development
Nation-building is a long-term process, and Indonesia’s President Joko Widodo has established a strong foundation. I am determined to build on that foundation. My core focus will first be on food security. Indonesia must be self-sufficient on food followed by energy security and self-sufficiency. Additionally we are determined, we are determined to bring down poverty. I’m determined to get rid of hunger amongst our people, especially the young. And in the end, we have to concentrate on processing our natural resources. We have to make a great effort in down-streaming and we have to industrialise. All of this needs good governance. I’m determined to cut down corruption and waste. And with this we are confident and determined to bring this about.
I’m very confident we can easily achieve a growth rate of 8 per cent and I am determined to go beyond 8 per cent within two or three years. What will be the growth driver in the first years will be our concentration on agriculture – food production and distribution. And energy. We want to go green in a very quick way. We want to produce our diesel from palm oil and this will be a very strong growth driver. You know we import $20 billion of diesel oil every year. So, can you imagine the savings we will have when we switch to biofuels?
On the perception of Indonesia being protectionist
I think that is a misperception. We are not protectionist. Every country in the world will want to protect the interests of its people. We want to industrialise. Those (nickel, coal and palm oil) are our national resources. We have to protect our interests in the sense that we must get the full value. We cannot keep importing industrial goods all the time. We will not be an advanced industrial society if we are just a producer of raw materials.
On enhancing welfare and governance
We are very confident we can do that (continue welfare programmes like the provision of free food and milk to students) despite a budget deficit of 3 per cent. We have a tradition of prudent fiscal management. I think we have the lowest debt to GDP ratio in the world – one of the lowest. So I think it is time for us to be a bit more daring within good governance.
On whether this means an increased budget deficit
We calculate that it is a matter of refocusing and cutting down waste, cutting down the allocation to non-essential activities. So, it is a matter of efficient, good governance, good administration, good management. And we are in the process of introducing e-governance – all government institutions. All government institution procurement will go through an e-catalogue. We will digitise and computerise. This will increase our tax ratio. We will revamp. We calculate that we can save a lot of money by cutting down waste and this will be a growth driver.
On the need to relocate the capital to Nusantara
The idea of moving the capital has been around since early years of our independence. Our first president, President Sukarno, broached this idea. First, the idea was to put our capital in a more central location. Second, Jakarta and its surroundings and Java are very highly populated. Third, we are facing a rise in the ocean levels – it has been between 5 and 10 cm every year. And so, we have to build a giant seawall. Moving the capital is one way to bring growth outside Jakarta, outside Java. And also, in the next few years, before the giant seawall can be completed, which will take maybe 10-15 years, our capital is safe from inundation.
On funding the relocation
The calculation is that we will need 30 years to complete this capital. So, if you say $30 billion over 30 years, that is $1 billion a year. Indonesia’s budget can carry that. Our capital city is a political project and the main drivers must be domestic resources, and then the foreign investment will come in later.
On what his motivation to lead is
Basically, it is the desire to serve the people. I grew up in many countries, and I saw many of my people are very poor. In my heart, I cannot accept that in this day and age, in Indonesia, a member of the G20, the fourth largest population, many of my people are living a very, very difficult life. And this is what drives me. I want to do my bit. I want to make my contribution. With my insights, my experience, my leadership, I feel I can do a lot to better the life of my people.
