Sri Mulyani: Downstreaming Pushes the Indonesian Economy Out of the Fragile Five

Armfalcon.com, JAKARTA — The Minister of Finance (Minister of Finance) Sri Mulyani Indrawati said that downstreaming natural resources (SDA) would also push Indonesia’s economy out of the category of Fragile Five countries. Downstreaming has been carried out with the obligation to build a smelter since 2014.

“The strengthening of Indonesia’s current account position cannot be separated from the structural policies and economic transformation carried out by the government, namely the downstreaming of natural resources,” said Sri Mulyani in Jakarta, Friday (19/5/2023).

The government has launched a natural resource downstream policy by requiring mineral mining companies to build smelters in stages since 2014. To carry out the program, the government provides various fiscal supports through improving the tax ecosystem and providing other fiscal incentives.

Indonesia was included in the Fragile Five category in 2013 along with Brazil, India, Africa and Turkey. But now, Indonesia has managed to break out of that category.

Previously, Indonesia experienced a deficit of 3.2 percent of GDP in 2013, which made Indonesia a fragile country. However, in 2021, the Indonesian economy will experience a renaissance with a surplus of 0.3 percent of GDP, and the surplus will even increase by 1 percent in December 2022.

He stated this when delivering the Macroeconomic Framework and Principles of Fiscal Policy (KEM PPKF) for the 2024 State Budget (RAPBN) in Jakarta. Furthermore, Sri Mulyani explained, efforts to create high added value played quite an important role in increasing Indonesia’s significant exports and trade balance.

The value of Indonesia’s exports in 2022 soared sharply and recorded the highest record in the history of the Indonesian economy, namely USD 292 billion, an increase of 66 percent from USD 176 billion in 2014.

“In 2022, the trade balance also recorded a record high of US$54.5 billion, until April 2023 Indonesia’s trade balance recorded a surplus for 36 months in a row,” he concluded.

source : Between