Jakarta, CNBC Indonesia – The Minister of Trade (Mendag) Muhammad Lutfi estimates that the demographic bonus in Indonesia will run out in 2038.
Lutfi explained that the GDP per capita in Indonesia during the Asian financial crisis in 1998 was US $ 463 per capita. In the next 10 years, Indonesia’s GDP per capita increased by 1,000% to US $ 4,051 per capita in 2018.
“The upcoming challenge, from US $ 4000, must grow to US $ 12,500 before our bonus demographics run out. Looking at the calculations, our demographic bonus will run out in 2038,” Lutfi explained in the webinar Millenial Hub: Millennial Fest x PPI Belgium, Saturday (17/4/2021).
According to the OECD, Lutfi continued, when the demographics of these bonuses ran out and Indonesia could not develop them, Indonesia would be trapped in a middle income trap.
Therefore, according to Lutfi, Indonesia needs strong new economic players to become a developed country in 2045.
“We need strong new economic players to become developed countries. Investments in infrastructure and technology experts, this is easy to say but difficult to implement,” he said.
In his presentation material, it is explained that the government has three scenarios to become a developed country. These scenarios are basic, high, and very high scenarios.
In the basic scenario, economic growth must be able to grow 5.1% per year and per capita income reaching US $ 19,794. In this way, the Indonesian economy is expected to rise to rank 7 globally.
In the high scenario, the economy is targeted to grow 5.7% per year, with a per capita income of US $ 23,199, and ranks Indonesia’s economy as 5th in the world.
Meanwhile, in the very high scenario, the economic growth is targeted to grow 6.4% per year and per capita income of US $ 28,934. Indonesia is expected to be ranked 4th in the world’s largest economy.
As for exports, it is expected that growth will reach 7.9% and its share of the Gross Domestic Product (GDP) could reach 54%.
“Our current manufacturing is not so bad, but in order to have a high economy of 6.4%, we must grow 32% of our manufacturing share to GDP,” Lutfi said.
“My projection is 8% for exports. That’s why we have to do many kinds of things, it has to start from now on,” said Lutfi.
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