Denpasar: The Finance Ministry said that Indonesia is projected to exit the middle income trap by 2036. It explained that the country's growth will be bolstered by the development of human resources.
"Economic transformation has been carried out to build a strong basis for improving Indonesia's economy," the ministry's Director for Center of Macro Economy, Hidayat Amir, remarked on the sidelines of the 9th Annual International Forum on Economic Development and Public Policy (AIFED) in Nusa Dua, Bali, on Friday, December 6, 2019.
According to him, public income is expected to reach US$12,233 per capita in 2036. It will continue its rising trend to touch US$23,199 per capita by 2045.
In its endeavor to achieve the target, the government has designed the national medium-term development plan (RPJMN) for the 2020-2024 period, with focus on the development of human resources, infrastructure, and bureaucratic and regulatory simplification, among others. The government has allocated Rp2,540.4 trillion (some US$177 billion) of state expenditure in its 2020 state budget plan.
Of the total expenditure, Rp505.8 trillion (US$35.28 billion), or some 20 percent, will be used for education. Rp132.2 trillion (US$9.22 billion), or five percent, will be used for the health sector.
In the fiscal policy, Amir stated that the ministry had provided tax incentive in the form of close to 300 percent research and development (R&D) deduction for certain R&D activities conducted in Indonesia . The government has also offered tax incentive for education and vocational training as well as research and development, with a maximum reduction of up to 200 percent of the total expenses incurred by a company.
Citing data of the National Development Planning Agency (Bappenas), Amir stated that Indonesia held vast potential, with its population estimated to reach 319 million in 2045. Of the total population, some 47 percent belong to the productive age group, while 70 percent of them are from the middle income group. (Antara)