Why Collaborative Recovery Matters for Sustainable Growth

The world was merely getting out of the pandemic when the war in Ukraine started, the war against Ukraine has been accompanied by a sharp rise in inflation under the pressure of food, energy and major commodity prices.?

Inflation had already been rising throughout 2021 as a result of increased demand caused by the economic recovery and the continued disruption of many value chains, but the war has accelerated it. And this movement has been more pronounced in emerging and developing countries. Inflation affects the poorest and weakest and contributes to increasing inequalities worldwide.

Governments all across the globe are racing to recover from the prolonged economic impact of the pandemic.?

Some are recovering at a greater rate than others, but as the global economy is interdependent with one country to another, a global economic recovery is needed to ensure a sustainable recovery.?

Indonesia Incorporated

Indonesia today, have pivoted their views on economic growth, the government has realized that the private sector plays an immense role in helping the country to grow.?

The idea is based on the innate Indonesian value of gotong -royong, a concept of collaborating towards the same goal for the greater good. This ideal gave birth to a framework of Public Private Partnership called Indonesia Incorporated, where the government views the private sector as a strategic partner to catalyze economic growth.?

Voices of the business community are heard and translated into regulations that could spur investments and employment.

One such initiative is the ratification of the Omnibus Law, or job creation law, the law was enacted to allow further collaboration and engagement with the business community, both domestic and global, by eliminating barriers and streamlining the process of doing business in Indonesia.

The law was proven to be effective as the realization of foreign direct investment? in the first quarter of 2022 increased by 31.8 percent, from Rp111.7 trillion in the same period last year to Rp147.2 trillion.

Meanwhile, realization of domestic direct investment? in the first quarter of 2022 increased by 25.1 percent, from Rp108 trillion in the same period last year to Rp135.2 trillion.

President Joko Widodo has set a target for Indonesia’s 100th anniversary called Indonesia Emas 2045 or the golden era of Indonesia in the year 2045, the government has set several milestones to achieve this golden era such as becoming a major hub for the electric vehicle ecosystem in the region, achieving net carbon neutrality, 100 percent internet penetration in the country, as well as the construction of the new capital city; Nusantara in East Kalimantan.?

In order to realize these ambitious goals, the country can't rely on the state coffers alone, the business community steps in to give inputs and financing models that are win-win for both parties, investors can gain profits, and the government can upgrade the nation's standard of living.?

?Another way to foster the concept of Indonesia Incorporated is through blended financing, the strategic use of development funds for the mobilization of commercial capital towards sustainable development in developing countries. Blended finance attracts commercial capital towards projects that contribute to sustainable development, while providing financial returns to investors.

Stable Politics, Stable Economics

We can also see the value of Gotong - Royong instilled in President Widodo’s visit to Ukraine and Russia in order to facilitate peace talks. Indonesia has shifted from an inward-looking country, solely meddling in domestic interest, to playing a vital role in facilitating world peace.

Political Stability needs to be achieved before working towards economic growth. It's all a matter of perceived confidence. We've seen how the war in Ukraine disrupted the global supply chain which skyrocketed the price of essential goods all over the world. Confidence towards Russia is at an all time low for multinational companies as most deem them to have violated Ukraine's sovereignty.

That is an example of how one’s foreign affairs policy damaged the global economy, but a stable domestic political climate is also crucial to spur economic growth.?

By nature, an election is a competition for the support of the populace, from the 2019 presidential election we’ve seen how differing political views could break apart the nation into different factions. Political campaigners in 2019 played heavily on identity politics and ethno-religious sentiments??

Looking ahead to the 2024 presidential election, we have to be vigilant towards candidates who deploy and use an us against them strategy which tries to divide the nation into boxes of ideologies.?

But it does not have to be this way. Election does not have to be a bloodbath, it can be peaceful and healthy competition? based on initiatives and groundbreaking nation building ideas. Instead of competing for absolute wins it's crucial to shift the mindset of our political leaders to make sure that they are competing to collaborate.?

We’ve seen this idea happen time and again, take the case of Pak Prabowo Subianto, even though he lost the presidential race, the incumbent made sure his nation building ideas and sense of resentment to the lost are channeled, and made up through his appointment as defense minister.?

On a smaller scale, when I was voted in for the Chairman of KADIN or Indonesian Chamber of Commerce and Industry I collaborated with my then competitors and instilled their ideas into policies and programs. At the end of the day, everyone’s trying to make the country a better place to live in, differing views should not be shut down immediately, everyone’s point of view and ideas should be taken in and analyzed, if possible incorporated.??

Once a country is deemed politically stable, it will give investors a sense of confidence and safety for their investment. For example, investors must be confident that if there is an exchange of power, the economic climate and social cohesion must be intact.?

The importance should be on the growth of our country, not merely a race to the throne. I’ve said it once and I'll say it again, collaboration and inclusivity are key to the sustainable growth of the global economy.