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Prabowo confident on 8 pct growth in first 3 years of presidency

Jakarta Globe - May 16, 2024

Jayanty Nada Shofa, Jakarta – President-elect Prabowo Subianto recently said that he was confident in achieving 8 percent economic growth within the first two or three years of his presidency.

Food production and Indonesian biodiesel production will also be among the main drivers of this targeted economic growth – which far exceeds the current figures.

"I have talked to my experts. I have studied the figures," Prabowo told the Qatar Economic Forum, as seen in a virtual broadcast by Bloomberg Live.

"I'm very confident we can easily achieve 8 percent. And I'm determined to go beyond," Prabowo, who is also the current defense minister, said.

Prabowo is planning to carry on the outgoing President Joko "Jokowi" Widodo's domestic processing policy. This strategy sees Indonesia banning exports of raw minerals –including nickel– in favor of processing them into greater-value goods at home.

The government is planning to extend the domestic processing policy beyond the mining sector. While the domestic processing policy is often promoted as a major booster to the economy, Prabowo said it would take time for the country to develop its downstream industries and reap its benefits.

"Downstreaming [or domestic processing of natural resources] will take several years. What will be the growth driver in the first years [of my presidency] will be our concentration on agriculture, food production and distribution, as well as energy. We want to go green in a very quick way," Prabowo said.

To unlock the 8-percent growth, the election winner is banking on biodiesel, which is expected to drastically cut Indonesia's diesel oil imports.

"We want to produce our diesel from palm oil. This will be a very strong growth driver. We import $20 billion worth of diesel oil every year," Prabowo said, while adding that the switch to biodiesel could help the country save its money.

Indonesia is implementing the mandatory 35-percent palm oil blend in its biodiesel – a policy better known as the "B35". According to Prabowo's campaign manifesto, the president-elect wants to increase this mandatory palm oil blend to B50 by 2029. Indonesia is the world's largest palm oil producer.

Prabowo's goals are far beyond the current gross domestic product (GDP) growth rate. The Indonesian economy expanded by 5.11 percent year-on-year (yoy) in the first quarter of 2024. Bank Indonesia said that Indonesia's GDP would likely grow between 4.7 percent and 5.5 percent yoy throughout the year.

Prabowo is set to officially rise to power this October. Jokowi's eldest son Gibran Rakabuming Raka will be his vice president.

Source: https://jakartaglobe.id/business/prabowo-confident-on-8-pct-growth-in-first-3-years-of-presidenc