The World Bank estimated that Indonesia will need 70 years to achieve a per capita income equivalent to that of developed countries such as the United States.
As quoted from World Development Report 2024: The Middle Income Trap that was published on Thursday, the 1st of August, the World Bank Chief Economist, Indermit Gill, wrote that such projection could occur if the Indonesian government does not make a breakthrough in encouraging an increase in per capita income.
“On current trends, it will take China more than 10 years just to reach a quarter of the US per capita income, Indonesia almost 70 years, and India 75 years,” Gill wrote as well.
In the World Development Report 2024: The Middle Income Trap, Gill further explained that going forward, the 108 countries, including Indonesia, that fall into the middle-income category (with an annual GDP per capita in the range of US$1,136 – US$13,845) will be facing certain challenges in escaping the middle-income trap. Some of these challenges are an ageing population, rising protectionism in developed countries, and the need to accelerate the energy transition.
Also Read Foreigners’ Shocked Reactions to Indonesian Workers’ Average Minimum Salary
“Too many of these countries have relied on old strategies to achieve development. They have depended on investment for too long and turned to innovation too soon,” Gill added.
On a separate occasion, according to the Indonesian Coordinating Minister for Economic Affairs, Airlangga Hartarto, the World Bank once praised Indonesia’s economic growth for being stable at around 5%. Moreover, the World Bank officials also appreciated Indonesia’s relatively low inflation level.
“The World Bank also appreciated the programmes carried out by the [Indonesian] government, such as, among others, poverty reduction and programmes related to infrastructure for agriculture which includes irrigation,” Hartarto told the press last Thursday, the 25th of July.
Hartarto also noted that the World Bank predicted global economic growth this year will be in the range of 2.6% – 2.7%. Meanwhile, the economic growth throughout next year, the World Bank predicted, will still be below 5% or around 4.8%.