Helmut Timothy & Vinnilya Huanggrio, Jakarta – Indonesia has what it takes to be among the world's largest economies by 2042, but this calls for collaboration across all sectors, including both the national and regional governments, according to Home Affairs Minister Tito Karnavian.

The minister said that forecasts by major financial institutions like the World Bank and the International Monetary Fund (IMF) had put Indonesia in the top five economies in 2042. Indonesia would be placed behind China, India, and the US.

"This is not just a dream because [the forecasts] make sense. Indonesia has an abundant workforce, demographic dividend, and natural resources," Tito said at the Inspiring Regional Government Award (APDI) ceremony in Jakarta on Tuesday evening.

Indonesia's economic growth has regularly topped 5 percent and it proves that the goal is achievable, according to Tito.

Despite the huge potential, there is a major prerequisite to make those forecasts come true– the central and subnational governments need to work together. Indonesian sub-regions –be it provinces, regencies, and cities– have their own local governments. This "decentralization" aims to spread growth across the archipelago.

"[The top five economies dream] would need to have the central and regional governments to work together. We are hoping for some innovations from all regions as we shifted from a centralized government towards decentralization in the post-New Order era," Tito said.

As Indonesia strives to grow its economy, sub-national governments are also doing what they can to help. A case in point is the East Java government whose agricultural downstream initiative has won them a 2023 APDI award for economic recovery.

"We are building the downstream agricultural sector. It is not just the production that we are focusing on, but the post-harvest sectors are also as important to increase the added value of our commodities," Mohammad Yasin, the head of the East Java development body, told Beritasatu on the sidelines of the gala dinner.

Yasin revealed that the farmer exchange rate in East Java had risen from 102-103 to almost 109 this year.

The East Java government also won an award for the most valuable basic public services. The province allocated 16 percent of its total budget for the health sector, higher than the minimum 10 percent.

"About 26 percent of our spending goes to education. [Regional governments] were supposed to allocate at least 20 percent of our spending for the education sector," Yasin said.

The Appreciation Gala was a collaborative effort between B-Universe Media Holdings, the Home Affairs Ministry, and the All-Indonesia Association of Regional Governments (Apkasi).

Source: https://jakartaglobe.id/news/regional-govt-also-key-to-indonesias-top-5-economy-dream-tit