By: Prabowo Subianto [excerpted from “Strategic Transformation of the Nation: Towards Golden Indonesia 2045”, pages 33-34, 4th softcover edition]
My fellow Indonesians, if you could take away just one thing from this book, it should be this:
As a nation, we must urgently achieve aggressive economic growth, or sustain growth rates above 6-7% and even reach 10% continuously.
Why? Because only through double-digit growth over ten consecutive years, starting with an average growth of 6-7% over the first five years, can Indonesia escape what is known as the middle-income trap.
The middle-income trap is a situation where a middle-income country continues to remain at that level. This is measured by the Gross Domestic Product (GDP) divided by the population, or GDP per capita. In 2020, our GDP per capita was USD 3,869.
A GDP per capita of USD 3,869 means an average monthly income of just USD 322, or about IDR 4.5 million.
To ‘move up a class’ to a high-income country, our GDP per capita must reach USD 13,000. This means the average monthly income of Indonesians needs to increase to USD 1,083, or about IDR 14 million.
If our economic growth remains around 4% or 5%, it will be difficult for us to make this leap. It’s like our body; if our growth doesn’t exceed 10%, we fail to develop into strong adults who can compete with developed nations.
This is a fundamental issue that we as a nation must recognize. We cannot be satisfied with 5% economic growth, as it equates to standing still. We cannot take pride if our country does not escape the middle-income trap.
Developed nations may grow at less than 5%, but Indonesia cannot afford that. We still have a major task ahead: We must quickly take off in pursuit of progress. We cannot afford to be complacent and stand still.
For comparison, Malaysia’s GDP per capita is already USD 10,401 – the average Malaysian earns about USD 866 per month, or around IDR 12 million per month.
Singapore’s GDP per capita is USD 59,797 – the average Singaporean earns about USD 4,983 per month, or approximately IDR 69 million per month.
