Education the key to Indonesia’s economy – Dr Indrawati

5 November 2018

What are the challenges facing Indonesia's economy as the country embraces the digital era? That was the question posed by Indonesia's Finance Minister, Her Excellency Dr Sri Mulyani Indrawati, during a public lecture at The Australian National University (ANU) today.

Dr Indrawati sees education as one of the keys to ensuring Indonesia's economy continues to go from strength to strength.

"It's not just about participation rate and access to education - both in primary and secondary school - but also the quality of education," Dr Indrawati said.

"Almost 10 years ago Indonesia decided 20 per cent of our budget should be spent on education. Fast forward 10 years and I'm disappointed Indonesia is not making significant progress on the budget that is allocated to education."

Dr Indrawati spoke about some of the key challenges facing Indonesia's economy going forward, including a stagnant manufacturing sector, and the widening gap between the rich and the poor.

"That widening gap can become a threat not only for economic progress but also to political stability," Dr Indrawati said.

"The economic crisis in 97/98 shifted the Indonesia economy almost permanently - and now the question for our policy makers is can we shift back onto a much better path for the future?"

Dr Indrawati says embracing new technology is important because it can create benefits for both Indonesian people and the economy in general, bringing with it efficiency, innovation and inclusiveness.

She made special mention of tech start-ups like Go-Jek, based in Jakarta, and pointed out small to medium sized enterprises are now better connected thanks to modern technology.

"In Indonesia we were able to produce a unicorn, a digital company built from scratch to become a global player."

"Now anybody can start a business anywhere. You can post on your Instagram saying you make the best fried chicken in the world and you are connected with your market immediately."

She has a positive outlook when it comes to Indonesia's current economic situation.

"Indonesia - as a developing and emerging economy - is actually growing quite robustly. Poverty has been reduced, for the first time in the history of Indonesia we're now at the single digit poverty level."

"Indonesia's economic situation is quite sound and favourable. We should appreciate our remarkable achievements."

Dr Indrawati has been Indonesia's finance minister since 2016, after previously holding the position from 2005-2010.