To reach 8% growth, Indonesia must make investment create jobs

Indonesia will need more than conventional growth drivers to achieve its 8 percent economic growth target, according to the Institute for Development of Economics and Finance.

Indef Executive Director Esther Sri Astuti said investment, exports, government spending, small-business lending and the energy transition should produce broader economic benefits. “If we look at the 8 percent economic growth target, it means we need extra effort. We have to find new sources of economic growth, not rely only on conventional growth,” she said at the Sarasehan 100 Ekonom forum.

Astuti said investment should not be judged only by the amount of capital entering the country. Its ability to create more and better-quality jobs should also shape policy. “Behind the investment figures, there is hope for the creation of more and better-quality jobs,” she said.

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If we look at the 8 percent economic growth target, it means we need extra effort. We have to find new sources of economic growth, not rely only on conventional growth.

Indef also called for stronger exports and government spending focused on programmes with wider multiplier effects and long-term benefits. In the financial sector, bank lending growth of about 13.58 percent needed to reach businesses more evenly, while small and medium-sized business credit grew only about 1.1 percent.

Astuti identified the energy transition as another potential source of growth. Indef proposed renewable-energy zones integrated with special economic zones, linking clean-energy supply with industrial demand and supporting manufacturing development.

She said investment policy should advance alongside other parts of the economy so that its effects reach more businesses and generate wider employment.

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Behind the investment figures, there is hope for the creation of more and better-quality jobs.