DBS Young Economist Stand-Up | Felicia Putri Tjiasaka, President University

Summary

Felici Putri, a student at President University, discusses the current economic landscape and contrasts it with the 1998 Asian financial crisis. While fears of another crisis arise due to currency depreciation and oil price drops, experts like GBS Group Research highlight that the situation today is vastly different. Indonesia is predicted to experience robust economic growth, driven by a youthful population, demographic dividends, and consistent GDP growth. To succeed by 2030, Indonesia must prioritize human capital, infrastructure development, and technological investment, aiming to become a major global economy in the 21st century.

Takeaways

• 😀 The global economic situation is facing challenges such as weakening currencies, falling oil prices, and a shortage of US Dollars in various countries.
• 😀 Economists are concerned whether the 1998 monetary crisis might repeat, but experts from GBS Group Research assure that the current situation is different.
• 😀 In 1998, Asia's debt and current account deficits were massive, leading to negative economic growth, but today’s context is far less severe.
• 😀 Despite a slowdown in retail, China’s retail sector is still growing consistently at 12-13%, indicating that the global economy isn’t entirely in a recession.
• 😀 The Federal Reserve's tapering off policy, initiated in 2013 as part of quantitative easing, is causing a pullback of US Dollars globally by raising interest rates and selling bonds.
• 😀 Indonesia has the potential to thrive in this situation with predictions for a 'Super Cycle' of growth, where the global economic power shifts from the West to the East.
• 😀 Standard Chartered's chief economist forecasts that Indonesia’s GDP will grow to $3.2 trillion by 2020, pushing the country into the world’s top five economies, surpassing France, the UK, Russia, Germany, and even Japan.
• 😀 Approximately 60-70% of Indonesia's population is in the productive age, with this number expected to peak at 80-85% by 2035, creating a demographic dividend for the country.
• 😀 If Indonesia can capitalize on this demographic advantage, the dependency ratio will decrease and productivity will rise, driving extraordinary economic growth.
• 😀 Key priorities for Indonesia’s future in 2030 include focusing on human resources, infrastructure development, and investment in technology, SMEs, and business units.
• 😀 If Indonesia successfully integrates human capital, infrastructure, and technology, it could transform into a developed nation by 2030, marking the 21st century as Asia's era, with Indonesia leading.

Q & A

What is the main concern discussed in the transcript regarding the economic situation?

The main concern discussed is whether the economic conditions today could lead to a repeat of the 1998 financial crisis, due to factors such as the weakening of currencies, falling oil prices, and a reduced supply of US dollars in several countries.

How does the current situation differ from the 1998 financial crisis, according to GBS Group Research?

According to GBS Group Research, the current situation is different from the 1998 crisis because back then, Asia's debt and current account deficits were enormous, leading to a negative economic growth rate of 13%. Today, despite challenges, the economy is showing positive growth.

What is the predicted outlook for the global economy and specifically for Indonesia according to Standard Chartered's chief economist?

Standard Chartered's chief economist predicts a Super Cycle growth with a shift from the West to the East, expecting Indonesia's GDP to grow at a consistent rate of 7%. Indonesia could reach a GDP of $3.2 trillion by 2020, potentially becoming one of the world's top five economies.

What does DBS Asian Insight report about Indonesia's population and its implications for economic growth?

DBS Asian Insight reports that 60% to 70% of Indonesia's population is of working age, with this percentage expected to peak around 2035. This demographic shift, known as the 'demographic bonus,' could significantly reduce dependency ratios and boost productivity, driving substantial economic growth.

What are the three key elements that need to be prioritized for Indonesia to thrive by 2030?

The three key elements are: 1) Development of human capital (skilled workforce), 2) Infrastructure development, and 3) Investment in technology, MSMEs (micro, small, and medium enterprises), and business units.

How important is technology and infrastructure for the future growth of Indonesia?

Technology and infrastructure are crucial for Indonesia's future. These elements must be integrated into businesses and supported by a skilled workforce. Without these, the country's potential for growth could be limited.

What demographic trend will Indonesia experience by 2035, and what effect will it have?

By 2035, the proportion of Indonesia's working-age population is expected to reach 80% to 85%. This demographic trend will lead to lower dependency rates and an increase in productivity, which could fuel significant economic growth.

What does the speaker suggest about the role of Asia in the 21st century?

The speaker suggests that while Europe dominated the 19th century and America ruled the 20th century, the 21st century belongs to Asia, with Indonesia poised to play a central role in this transformation.

Why is Indonesia expected to grow significantly by 2030?

Indonesia is expected to grow due to its strategic demographic advantage, a growing workforce, and its potential to utilize its human capital, infrastructure, and technology to achieve sustainable economic growth.

What does the term 'Super Cycle growth' refer to in the context of Indonesia’s economy?

In this context, 'Super Cycle growth' refers to a prolonged period of consistent and strong economic growth, driven by the shift in global economic power from the West to the East, with Indonesia being one of the key beneficiaries.