Transition Toward a New Economy

Kompas/Heru Sri Kumoro

President Joko Widodo talks with CEOs after being keynote speakers at the 12th Kompas100 CEO Forum by East Ventures at the State Palace, Jakarta, Thursday (18/11/2021).

President Joko “Jokowi” Widodo has emphasized that all parties must quickly carry out a transformation toward a green and digital economy, which is expected to be the backbone of the economy in the future.

Indonesia has enormous potential with regard to the green economy. For this reason, the government has begun to work out the foundation for its development because, in the future, countries will abandon products derived from fossil energy.

In his address at the 2021 Kompas100 CEO Forum Powered by East Ventures at the State Palace in Jakarta on Thursday (11/18/2021), the President said the discussion at the Group of 20 would no longer be about the old economy and would now be centered on a green economy. Indonesia is aware that it would have great power in the green economy as it has a lot of green energy sources, such as hydropower, geothermal energy and wind power.

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The President also said the digital economy in the country should be further strengthened as Indonesia had great potential to move forward in this area. For example, Indonesia has 2,229 start-ups. By 2025, Indonesia’s digital economy is expected to be worth US$124 billion (Kompas, 19/11/2021).

The President has been very clear that Indonesia must move toward a new economy based on a digital economy and a green economy. It will certainly take hard work to build infrastructure and make the transition from the old economy, based on fossil fuels, which often cause environmental problems, to a new economy based on environmentally friendly sources of energy.

KOMPAS/RADITYA HELABUMI

Vice President Director of PT Pan Brothers tbk Anne Patricia Sutanto at the Kompas100 CEO Forum "Healthy Economy 2022" which was held hybridly at the State Palace and Jakarta Convention Center (JCC), Jakarta, Thursday (18/11/2021).

Speed is the key to making various economic activities more environmentally friendly. The President said the next two years should be used to spur the economic transformation. Impeding regulations would have to be replaced immediately, he said.

We have to work fast so that we will be able to pass the transition period smoothly and enter the new economy on time.

In addition to infrastructure, human resources play a key role in building a new economic ecosystem. To that end, the President encouraged the establishment of world-class leadership in education involving well-known universities in the world, such as Oxford University and Harvard University.

The government also needs to encourage new investors to enter into new ventures.

In the transition period, all parties need to work fast. State-owned enterprises should become a role model in the transition and transformation initiative. State-owned enterprises should also forge partnerships with private companies and start-ups in the economic transformation. The government certainly needs to quickly provide support to spur the transformation into the new economy. Supporting regulations need to be prepared immediately. The government also needs to encourage new investors to enter into new ventures.

It should not be forgotten that the transformation into a new economy must involve those at the bottom. They consist of small and medium-sized enterprises (SMEs) that have successfully survived the pandemic and become the solution to economic problems. Some have been engaged in the new economy with the help of digital technology. We hope that more SMEs will be able to do the same and will not be left behind.

(This article was translated by Hendarsyah Tarmizi).