Jayanty Nada Shofa, Jakarta – President-Elect Prabowo Subianto recently revealed that his incoming government would not adopt the trickle-down economics approach, saying that all Indonesians regardless of their class should enjoy the country's wealth.
The trickle-down economics refers to policies that favor the rich and corporations in hopes that the benefits will eventually trickle down to everyone else, particularly the less fortunate. For instance, the government might grant large corporations tax cuts, and these companies can use the money to expand their businesses, which would help spur job opportunities.
On Wednesday evening, Prabowo wrapped up the 2024 BNI Investor Daily Summit by giving a glimpse of his upcoming economic policies just 11 days before his inauguration ceremony.
Indonesia boasts a population size of over 280 million as of the first half of 2024. The mineral-rich country has been growing at around 5 percent over the past years. The Central Statistics Agency (BPS) reported that the Indonesian economy expanded 5.05 percent year-on-year in the second quarter of this year.
The archipelagic and populous Indonesia, however, still needs to ensure equality across all levels of society. And a trickle-down economics approach would take way too long before Indonesia can see its effects, according to Prabowo.
"Despite all our advantages, we are facing a huge challenge. A 5-percent growth for years straight is nice, but we have to admit that we still have to work on achieving greater [wealth] equality," Prabowo said at the 2024 BNI Investor Daily Summit in Jakarta.
"We have to be brave to fix our system. We have to ask ourselves what we can do to make sure that Indonesia's wealth is fairly distributed to all, not just a small number of people. We cannot rely on trickle-down economics. It is too slow," Prabowo said.
The former army general also defended his intentions to achieve an 8-percent growth that many perceive as being too ambitious. Prabowo even brought up one of the Indonesian founding father Soekarno's famous quotes of never being afraid to dream big.
According to the defense minister, there is nothing wrong with setting substantial growth targets as long as the country works hard to achieve them. So if he fails and only achieves a 7.5 percent growth rate, the economy is still growing at a robust pace.
"They often mocked me for wanting 8 percent growth, but that's okay. ... Remember what Soekarno said: 'Dream as high as the sky. So if you fall, you will fall among the stars. I dream of 8 percent growth, if I fail, then it can drop to 7.5 or even 7 percent. If we are satisfied, then we can aim for 6 percent. If we end up with a 5.3 percent growth rate, that's alright," Prabowo told the conference.
He added: "Perhaps if not 8 percent, our economy will expand by 9 percent. Don't believe it? Just wait and see."
Prabowo has ear unveiled his plans to unlock economic growth of 8 percent within the first three years of his presidency. His plans include ramping up palm oil-based biodiesel production to cut imports of diesel oil.