Jakarta (Indonesia Window) – The Indonesian economy needs to grow 6.4 percent annually to become a developed country by 2045 and escape the middle-income trap, a minister has said.
“This means that by 2045 our GDP (the Gross Domestic Product) per capita is around 29,000 U.S. dollars and we will become the 4th largest economy in the world, and will be able to get out of the middle income trap by 2034,” Trade Minister Muhammad Lutfi said in a webinar entitle ‘Empowering SMEs (small-and-medium entrepreneurs) to Recover Stronger’ here on Friday (March 11).
Therefore, the investment contribution to the GDP should be increased from 33 percent to 39 percent in 2045 with a growth of 7.3 percent per year.
The manufacturing industry should also contribute to the GDP up to 32 percent per year with an average growth of 7.8 percent per year.
In addition, according to Lutfi, exports should increase from the current 34 percent of the GDP to 54 percent, so that it could shift household consumption as the largest contributor to national the GDP.
To that end, the Indonesian government has boosted investment in infrastructure to make per capita logistics costs affordable, and technology transfers to human resources could be carried out.
Indonesia should leave a middle-income country status in 2045 while still having a demographic bonus in which the number of productive age people is higher than the elderly.
“Indonesia is predicted to run out of its demographic bonus from 2038 to 2040. This is the last deadline for Indonesia to become a developed country,” Lutfi said.
Reporting by Indonesia Window