Our World in 2018

GLOBAL VS. LOCAL WORLDS
East Asia’s Rising Star
By Sri Mulyani Indrawati
At the World Bank Group’s Annual
Meetings in Washington, DC, in
October, there was notable optimism
in anticipation of an upswing in the global
economy. The International Monetary Fund’s
latest World Economic Outlook projects
that global growth will accelerate to 3.6% in
2017, and to 3.7% in 2018. Not surprisingly,
investment, trade, industrial production,
and business and consumer confidence
have continued to increase in several key
economies and regions.
Indonesia intends to capitalize fully on
this upswing. In 2017, it consistently posted a
respectable growth rate of around 5% – better
than most emerging economies – owing to
increased investment and consumption, and
a recovery in exports, partly owing to the
pick-up in commodity prices. In fact, exports
are becoming an increasingly reliable third
engine of growth for the country.
Better still, Indonesia’s macroeconomic
indicators are sound. The country is
experiencing solid growth in new jobs and
around 4%. Moreover, food prices are steady,
consumer confidence is strong, interest
rates are low, and the exchange rate has
remained consistent. Domestic and foreign
direct investment have been picking up, too,
thanks to increased infrastructure spending.
These positive trends have added
momentum to ongoing reforms. After all,
the best time to mend one’s roof is when
the sun is shining.
Accordingly, President Joko Widodo’s
government is pushing ahead with key
measures that will create a strong foundation
for higher long-term competitiveness.
And alongside structural reforms, we are
pursuing prudent fiscal and monetary
policies, with our sights set well beyond the
horizon. The proof of Indonesia’s progress is
Sri Mulyani
Indrawati
Sri Mulyani
Indrawati is
Finance Minister
of Indonesia and
Chair of the World
Bank Group’s
Development
Committee.
in the pudding. Indonesia has gained growing
international recognition, with three major
rating agencies having issued the country
an investment-grade credit rating. According
to an OECD/Gallup poll, 80% of Indonesians
– the highest among all countries surveyed.
Moreover, Indonesia’s standing in the
World Bank’s “Ease of Doing Business” ranking
has skyrocketed 34 places since the current
.
improved business and investment climate
under President Joko Widodo’s leadership,
Indonesia has been named a top-ten reformer.
Toward the end of 2017, the Indonesian
parliament approved a robust 2018 national
budget, which aims to boost confidence
further, increase productivity, and enhance
the country’s competitiveness. For the past
three years, the government has pushed
hard to invest in the future by closing the
country’s infrastructure and human-capital
gaps. The new budget will continue that work
by increasing investments in both areas to
unprecedented levels.
Even more than our natural resources
and strategic location, our people are the
most precious assets of all. As the world’s
fourth most populous country, Indonesia
has a large and vibrant young workforce
that will fuel inclusive growth well into the
future. Indonesian millennials are more
previous generation. They are our future
entrepreneurs, job creators, professionals,
civil-society leaders, and taxpayers. And they
are already competing vigorously in the digital
economy, where technological innovations
will continue to introduce new opportunities
and challenges.
The next generation will have to start
preparing today for the jobs and opportunities
of tomorrow. To that end, the government
has placed special emphasis on investments
in human capital. More than 20% of the
138 2018 | OUR WORLD