Optimism Amidst the Storm
The celebration of the 100th anniversary of the Republic of Indonesia’s independence is only 19 years away. The remaining time is not long. The big question is: can Indonesia realise its ambition of becoming a developed country with a Gross Domestic Product (GDP) of around US$9.8 trillion and a per capita income of around US$30,300 by 2045?
This target is indeed very ambitious. If Indonesia’s GDP is currently estimated to have reached around US$1.5 trillion with a per capita income of around US$5,100, then over the next 19 years GDP must increase more than sixfold, while per capita income must also leap almost sixfold.
However, the target is not impossible. History shows that Indonesia has recorded major economic leaps. In 2007, Indonesia’s nominal GDP was only around US$470 billion with a per capita income of around US$1,900. Over the 19 years to 2026, national GDP increased to around US$1.5 trillion, or more than threefold, while per capita income rose to around US$5,100. This means Indonesia has proven that economic transformation can occur when macroeconomic stability, investment, and reform go hand in hand.
The challenges towards 2045 are certainly much heavier. Raising per capita income almost sixfold is impossible to achieve if the economy only grows at around 5% per year as it has over the last two decades. Indonesia needs a new leap through higher economic growth, much greater productivity, and faster structural transformation. Therefore, an economic growth target of around 8% is not merely a political figure, but an economic necessity if Indonesia wants to escape the middle-income country trap and join the group of developed nations.
Indonesia actually has strong capital to realise this target. First, the demographic bonus. Around 70% of the population is of productive age. This is an opportunity that comes only once in history. The demographic bonus will only be a blessing if it is accompanied by improvements in the quality of human resources through better education, vocational training, mastery of science and technology, as well as the adoption of artificial intelligence (AI) and digital transformation across all economic sectors.
Second, natural resource wealth. Indonesia has vast reserves of nickel, copper, bauxite, tin, coal, gas, plantation products, fisheries, and biodiversity. Economic added value must no longer stop at raw material exports. Downstreaming must be expanded into industrialisation that produces semi-finished goods and high-value-added manufactured products so as to increase exports, foreign exchange, employment, and national productivity.
Third, the national economic foundation is relatively strong. Financial system stability, relatively controlled inflation, a government debt ratio that is still moderate compared to many countries, and a large domestic market are important assets to support long-term growth. This foundation must be maintained so that business and investor confidence remains high.
Fourth, investment potential remains very large. Indonesia remains one of the investment destinations in Asia due to its market size, natural resources, and long-term prospects. Investor confidence has indeed been pressured by global uncertainty and various domestic factors. However, this confidence can be restored through consistent policies, better governance, and strong legal certainty.
These four assets must be strengthened with sustainable reform. The government needs to simplify regulations, accelerate licensing, improve bureaucratic quality, strengthen legal certainty, eradicate corruption, reduce budget leakage, and ensure every rupiah of state spending produces higher productivity. At the same time, the business world must increase investment, innovation, and job creation, while universities are encouraged to become centres of research and technology development that support national industry.
Infrastructure development must also shift from merely building connectivity to development that increases economic productivity. Food security, energy security, the digital economy, high-tech manufacturing industry, the green economy, and the development of MSMEs and cooperatives must become new growth engines so that the benefits of development are felt inclusively.
Achieving a GDP of nearly US$10 trillion by 2045 is indeed not an easy task. However, the target is not an impossible dream. With consistent leadership, appropriate policies, clean governance, legal certainty, improved human resource quality, and close collaboration between government, business, academia, and society in the spirit of Indonesia Incorporated, Indonesia has the opportunity to realise its ambition of becoming a developed country by 2045.