Armfalcon.com, JAKARTA — Minister of Finance Sri Mulyani met with the United States Chamber of Commerce. The Government of Indonesia was invited to attend an event organized by the World Bank, ie Unlocking the Full Potential Of Digital Transformation In Southeast Asia: The Role Of Public And Private Sector.
Sri Mulyani revealed that Indonesia’s financial sector assets are still relatively low when compared to other Asean countries. In the past decade, banking has dominated Indonesia’s financial sector, which contributes around 60 percent to gross domestic product.
“However, the total assets of insurance and pension funds are quite low, or equivalent to 5.5 percent and 7.2 percent of GDP,” Sri Mulyani wrote on her official Instagram account @smindrawati, quoted on Saturday (15/4/2023).
Throughout 2022, the Ministry of Finance recorded bank assets per new gross domestic product of 59.5 percent. This figure is quite small compared to other countries in ASEAN 5 which are already above 100 percent.
Sri Mulyani conveyed that in order to realize the ideals of an advanced Indonesia in 2045, it needs to be supported by a strong financial services sector. Therefore, the government together with the DPR are pushing for the transformation of Indonesia’s financial sector through the issuance of Law no. 4/2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK/Financial Sector Omnibus Law) which aims to overcome the challenges of the Indonesian financial sector through five pillars.
First, increasing access to financial services. Second, promote long-term sources of finance. Third, increase competitiveness and efficiency. Fourth, developing instruments and strengthening risk mitigation. Fifth, strengthening investor and consumer protection.
In its formulation, the Ministry of Finance also involved community participation to ensure that the public and other parties with an interest in the P2SK Law drafting process had the right to be heard, their opinions considered, and explanations given.
“Through this reform, it is hoped that the resilience of Indonesia’s financial system will get stronger and public interest in investment instruments in Indonesia will also increase,” wrote Sri Mulyani.
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