Rising Economy and a Sinking Capital City: Indonesia’s Economic Growth and Its Challenges

Most of the major economies in the world are struggling with recession, but not Indonesia. This most populous country in Southeast Asia even managed to maintain strong export and import during the pandemic, and witnessed a strong rebound after the Covid 2019 crisis. Its inflation rate is relatively low and has one of the best performing Asian currencies. It has a growing young population, a prospering electronic vehicle industry and tech innovation sector. It is attracting foreign investment from all over the world. The world’s leading consultancy firm PwC even predicted that in 2050 Indonesia will be the 4th biggest economy in the world.

But the country still has many problems to solve: corruptions, uneven development, domestic terrorism, to name just a few. Its capital city, Jakarta, is sinking into the ground due to climate change and over population; and while China is a very important investor and trade partner of Indonesia, China’s expanding maritime power in the disputed islands/islets in the South China Sea can also become a ticking bomb in the Indonesia-China relations.

Would Indonesia fulfill its potential? What are the obstacles it has to overcome? We invited Dr. Gracia Paramitha to discuss these topics on our podcast. Gracia is a lecturer at the London School of Public Relations Institute of Communication and Business, Jakarta. She is also a research consultant on climate economy at the Centre for Strategic and International Studies Indonesia. Her research focuses on the G20, climate governance, sustainable development goals (SDGs), youth, climate change politics, and environmental policy. She has supported the G20 Indonesia 2022 presidency through collaboration among engagement groups.

More about Dr. Gracia Paramitha’s work: https://th.boell.org/en/person/gracia-paramitha

This episode was edited by Aaditya Surve and Liwen Qin

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