Political Economy of the Sapu Jagat (one-size-fits-all) Law

Speed that is too low will make a plane stall. Likewise, the economy requires a minimum speed to be able to provide added value, employment opportunities and foreign exchange.

KOMPAS/PRIYOMBODO

Construction workers finish a concrete pillar on 14 Dec. 2019 at the site of the Light Rail Transit (LRT) Jabodebek project on Jl. H.R. Rasuna Said in South Jakarta. According to the World Bank Quarterly Report, Indonesia’s economic growth is estimated to reach 5 percent in 2019 and 5.1 percent in 2020.

Economic growth data shows that over the past five years, Indonesia has entered a cruising speed of 5 percent per year. This amount is enough to place Indonesia in second position among the G-20 countries. This growth is in accordance with the Philip curve concept, namely a balance between growth and inflation to maintain purchasing power.

Nevertheless, there are still aspirations for Indonesia to grow faster to get out of the trap of middle-income countries. A rough calculation shows that to grow in the range of 5.3-5.5 percent, investment growth of 8-9 percent is needed. Meanwhile, for growth higher than that, investment growth above 10 percent (double digit) is needed.