Jakarta - President-elect Prabowo Subianto expressed confidence in reaching 8 percent economic growth within the first two to three years of his presidency. Key drivers for this ambitious target include food production and Indonesian biodiesel production, significantly surpassing current economic growth figures.
"I have discussed this with my experts and reviewed the data," Prabowo stated at the Qatar Economic Forum, as seen in a Bloomberg Live virtual broadcast. "I'm very confident we can easily achieve 8 percent, and I'm determined to go beyond," he added. Prabowo is also the current defense minister.
Prabowo plans to continue outgoing President Joko "Jokowi" Widodo's domestic processing policy, which involves banning raw mineral exports, such as nickel, in favor of processing them into higher-value goods domestically. This policy, expected to extend beyond the mining sector, is promoted as a significant economic booster, though Prabowo acknowledged it would take time to develop the necessary downstream industries and see benefits.
"Downstreaming will take several years. The growth drivers in the early years of my presidency will be agriculture, food production and distribution, and energy. We aim to go green quickly," Prabowo said.
To achieve the 8 percent growth, Prabowo is relying on biodiesel production to significantly reduce Indonesia’s diesel oil imports. "We aim to produce our diesel from palm oil, which will be a strong growth driver. We import $20 billion worth of diesel oil annually," he said, noting that the switch to biodiesel could help the country save money.
Indonesia currently implements a mandatory 35-percent palm oil blend in its biodiesel, known as “B35.” Prabowo’s campaign manifesto includes plans to increase this mandatory blend to B50 by 2029. Indonesia is the world’s largest palm oil producer.
Prabowo’s growth targets far exceed the current GDP growth rate. The Indonesian economy grew by 5.11 percent year-on-year (yoy) in the first quarter of 2024. Bank Indonesia projects a GDP growth rate between 4.7 percent and 5.5 percent yoy for the year.
Prabowo is set to assume office this October, with Jokowi’s eldest son, Gibran Rakabuming Raka, as his vice president.
Berzatu, a consulting company helping various other organizations and companies do business in Indonesia and Asia Pacific is well positioned to support this growth.
