Senior Economist at the Institute for Development of Economics and\nFinance (Indef), Didik J. Rachbini, has criticised the economic policies\nunder Prabowo Subianto\u2019s leadership, describing them as inward-looking\nand neglectful of the external sector. Didik argued it is time for the\ngovernment to transition to an outward-looking perspective.<\/p>\n
\u201cThe weakness, shortcoming, or even error in economic policy\nregarding efforts to increase economic growth is primarily just one\nthing: neglecting the external sector. All efforts and dynamics so far\nhave been too inward-looking. Only the domestic sector is packaged with\nvarious policy controversies, yet the result remains moderate growth of\naround 5 percent,\u201d Didik said in a statement on Sunday (9\/8\/2026).<\/p>\n
He assessed that government spending will not be sustainable as it\nmerely acts as a buffer to prevent economic growth from falling below 5\npercent. Moreover, the fiscal side also has problems in terms of both\nrevenue and expenditure, so it will not last long and can only provide\nsupport in the very short term.<\/p>\n
In addition, the factor of public consumption can no longer be fully\nrelied upon. The middle class has been eroded and its numbers have\ndeclined, thereby hampering economic growth from the consumption\nside.<\/p>\n
Didik noted that Indonesia, with its large population, indeed has a\nlarge domestic market. However, the issue is not just relying on large\ndomestic consumption, but ensuring Indonesian businesses can move up a\nclass because they are forced and given the opportunity to compete in\nthe global market.<\/p>\n
\u201cThis is where outward-looking policy becomes important because it\ncan encourage Indonesia to exist in global competition with the hope of\nobtaining large foreign exchange earnings,\u201d he said.<\/p>\n
He argued that if inward-looking policies continue, economic growth\nis predicted not to be higher than what is achieved now. This must be\nrealised because the export factor has not yet become a strong enough\ngrowth engine to drive industrial transformation.<\/p>\n
For a country as large as Indonesia, the domestic market is indeed\nimportant, but the domestic market alone is not enough to produce\nworld-class industrialisation. \u201cTo get there, there is no other way but\nto manage the external sector with export-oriented policies,\u201d he\nstressed.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indef-urges-government-to-adopt-outward-looking-policies-to-achieve-8-growth-1786323059", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }