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Development Miracle or Middle-Income Trap? How Indonesia Can Accelerate Progress Toward Golden Indonesia 2045
Indonesia needs integrated reforms to diversify its economy, close social and regional gaps, and accelerate its green transition to reach high-income status by 2045.
The recent inauguration of a new administration under President Prabowo Subianto, the expiry of the National Long-term Development Plan (1995？2025), and Indonesia’s recent Group of 20 Presidency and Association of Southeast Asian Nations Chairmanship provide an opportunity to take stock of the country’s progress toward sustainable development.
Indonesia has experienced dramatic economic advances in recent decades, marked by vast improvements in infrastructural development, rising per-capita incomes, expanding health, electricity, and education services, and growing international influence and cooperation.
However, the country faces considerable income inequalities, digital divides, and rural？urban disparities and an eroding middle class, escalating climate risks amid a persistent reliance on coal, an undue reliance on primary and extractive industries and widespread labor market informality, and shortfalls in the quality of public services despite increased access.
To advance the objectives of Golden Indonesia 2045 and escape the middle-income trap, this brief recommends that Indonesia foster economic diversification and resilience, improve social inclusion and invest in human capital, accelerate the green transition, and strengthen international partnerships and regional integration.
The recent inauguration of a new administration under President Prabowo Subianto, the expiry of the National Long-term Development Plan (1995？2025), and Indonesia’s recent Group of 20 Presidency and Association of Southeast Asian Nations Chairmanship provide an opportunity to take stock of the country’s progress toward sustainable development.
Indonesia has experienced dramatic economic advances in recent decades, marked by vast improvements in infrastructural development, rising per-capita incomes, expanding health, electricity, and education services, and growing international influence and cooperation.
However, the country faces considerable income inequalities, digital divides, and rural？urban disparities and an eroding middle class, escalating climate risks amid a persistent reliance on coal, an undue reliance on primary and extractive industries and widespread labor market informality, and shortfalls in the quality of public services despite increased access.
To advance the objectives of Golden Indonesia 2045 and escape the middle-income trap, this brief recommends that Indonesia foster economic diversification and resilience, improve social inclusion and invest in human capital, accelerate the green transition, and strengthen international partnerships and regional integration.
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