Illustration: Luo Xuan/GT

President Joko Widodo started his second term in office after winning the recent presidential elections in Indonesia. In a speech after swearing the oath of office in Jakarta on October 20, Widodo proposed the Indonesia's 2045 vision, pledging to make the country one of the top five world economies with a total GDP of $7 trillion and an annual GDP per capita of $320 million rupiah ($22,807) by the time it celebrates 100 years of independence in 2045. Considering Indonesia's current GDP stands at just over $1 trillion and 9.41 percent of Indonesian population live under the poverty line by March, according to Head of Indonesia's Central Statistics Bureau (BPS) Kecuk Suhariyanto, Widodo's ambition faces multiple challenges even though measures to boost the economy adopted by Widodo in his first term built a crucial foundation for the vision 2045.

First, the Indonesian government implemented practical economic development planning which has achieved significant results in the past five years. The progression on construction of industrial parks drew a great amount of investment from the outside world. The country's maritime infrastructure brought down logistic cost and facilitated local economic development. From 2015 to 2018, the Indonesian economy showed a stable development trend with an economic growth rate of around 5 percent annually. Indonesia ranked second in annual GDP growth rate among G20 countries in the second quarter of 2019. The country's economy may encounter downward pressure in 2019, but Indonesian Finance Minister Sri Mulyani Indrawati said the government's forecast for the country's economic growth this year is 5.2 percent.

Second, Indonesia's development strategy has gained its plaudits. The government launched its "Making Indonesia 4.0" roadmap as a national level strategy, with the goal of upgrading the economy's competitiveness and boosting industrial output. Looking into the content, it is no doubt a response to the Fourth Industrial Revolution. Boosting high-technology industries has become an important direction for this strategy. Food, beverages, automobiles, textiles, electronics and chemical industries are the preferred directions. 

As a key achievement, Indonesia's new economy output is rising. The country has generated five unicorn companies each with value surpassing $1 billion. As a result, international markets have maintained positive expectations for the Indonesian economy. A Financial Times report said that Indonesia's GDP will surpass countries including Russia, Brazil, the UK and France and become the sixth-largest economy in the world by 2023 in purchasing power parity (PPP) terms. In the PricewaterhouseCoopers report The World in 2050, Indonesian economic growth is projected to rise to fourth in the world in PPP terms.  

Third, global economic order rebuilding and a shifting of industrial chains have provided opportunities for Indonesia. With "Making Indonesia 4.0" to attract industries to Indonesia, the country's late-mover advantages, which may feature slower growth in the early stage but high starting point, can be better utilized.

It cannot be denied that vision 2045 also faces challenges, especially as poverty ratio remains high and low government efficiency. The latter manifests in two ways. For one, red tape and complex government approval procedures impact the country's business environment, which is a barrier to foreign investment and leads to weak competitiveness of industrial development. Also, there are obstacles for government policy implementation with intertwined party competition and interest group conflict. Rising extremism, separatism and waves of movements and demonstrations could also be a potential threat to Indonesia's vision 2045. While impacting political order, they deeply shape economic and social development. Political leaders in Indonesia in future will find it hard to break away from these factors. It will test Widodo and his successors' confidence and determination to push forward economic reform. 

Widodo's 2045 ambition is also a century-long dream for the Indonesian people. The dream is difficult to achieve and very challenging, but not impossible. 

The author is a research fellow with the Charhar Institute and the College of ASEAN Studies at Guangxi University for Nationalities. bizopinion@globaltimes.com.cn