Resource information
Within the next two decades Indonesia
aspires to generate prosperity, avoid a middle-income trap
and leave no one behind as it tries to catch up with
high-income economies. These are ambitious goals. Realizing
them requires sustained high growth and job creation, as
well as reduced inequality. Can Indonesia achieve them? This
report argues that the country has the potential to rise and
become more prosperous and equitable. But the risk of
'floating in the middle' is real. Which pathway
the economy will take depends on: (i) the adoption of a
growth strategy that unleashes the productivity potential of
the economy; and (ii) consistent implementation of a few,
long-standing, high-priority structural reforms to boost
growth and share prosperity more widely. Indonesia is
fortunate to have options in financing these reforms without
threatening its long-term fiscal outlook. The difficulties
lie in getting the reforms implemented in a complex
institutional and decentralized framework. But Indonesia
cannot afford hard to not try harder. The costs of
complacency, and the rewards for action, are too high.
