By: Prabowo Subianto [excerpt from “Strategic Transformation of the Nation: Towards a Golden Indonesia 2045”, pp. 53-54, 4th edition]
Indonesia is facing various global strategic challenges, including climate change, geopolitical conflicts, and the rapid advancement of artificial intelligence. In addition to these, the nation also grapples with pressing domestic issues.
One of the critical challenges is the narrowing window of our demographic dividend. There is a continuous outflow of national wealth, leading to economic inequality and lack of uniformity. Moreover, financial influence heavily impacts our democracy.
Our progress towards becoming a developed and prosperous nation depends on effectively managing and overcoming both global and local challenges.
The Demographic Dividend Challenge
Our population, with a median age of 29 years, is a valuable asset as it represents the most productive age group for learning and working efficiently.
However, this youth bulge will not last forever. As the population growth rate slows down, the proportion of young individuals will decrease. According to projections by Bappenas, the median age is expected to increase by 2035.
Historically, nations struggle to achieve wealth and prosperity when their population ages beyond the productive stage. As Indonesia aims to transition to a high-income status, the GDP per capita must reach $14,000, equivalent to IDR 210 million annually or around IDR 17.5 million monthly per resident.
We have a limited time of 13 years to avoid falling into the middle-income trap and prevent becoming an aging society before attaining wealth, similar to the situation in Thailand. To steer clear of this fate, rapid economic growth is crucial to ensure prosperity before the demographic profile shifts significantly.
