By: Prabowo Subianto [excerpt from “Strategic Transformation of the Nation: Towards a Golden Indonesia 2045”, pp. 53-54, 4th edition]
Indonesia is currently facing various challenges on both a global and national scale. The global challenges include issues such as climate change, geopolitical conflicts, and the rapid advancement of artificial intelligence. Within the nation, there are pressing issues that need to be addressed.
One of the significant challenges is the narrowing window of the demographic dividend. Currently, Indonesia’s national wealth is flowing out of the country, leading to a consistent net outflow of wealth. Additionally, the economy is characterized by inequality and lacks consistency. Moreover, there is excessive financial influence in politics, compromising the democratic system.
The ability of Indonesia to transition into a developed and prosperous country depends on how effectively it can manage and overcome these global and domestic challenges.
The demographic dividend is a crucial asset for Indonesia, given the current median age of 29 years. This indicates that the majority of the population is in their most productive years, ideal for learning and working efficiently. However, this youthfulness will not last forever, as the rate of population growth is slowing down. Projections suggest that by 2035, the median age will increase, signaling a decline in the proportion of young people.
It is essential for Indonesia to avoid falling into the middle-income trap and strive to achieve high-income status. This requires a significant increase in GDP per capita to reach $14,000 or approximately IDR 210 million per year, which translates to a monthly income of around IDR 17.5 million for each resident.
With only 13 years to escape the middle-income trap, Indonesia must ensure rapid economic growth to become prosperous before the demographic profile ages significantly. Learning from the example of Thailand, Indonesia must aim to achieve wealth before becoming an aged society.
