President Joko “Jokowi” Widodo is drafting a 2025-2045 National Long-Term Development Plan (RPJPN) for the next presidents to realize his Golden Indonesia 2045 vision to transform Indonesia into a developed country by 2045 with an income per capita of US$30,300, a vision many see as impossible to achieve considering many challenges plaguing the country.

The 2025-2045 RPJPN, drafted by the National Development Planning Ministry/National Development Planning Agency (Bappenas) and launched by President Jokowi last week, will be soon to be submitted to the House of Representatives for further deliberation. The government expects the RPJPN bill would be passed into law sometime in September or before the registration of the presidential/vice presidential candidates with the General Elections Commission (KPU) in November.1 

The RPJPN, essentially a 20-year development road map, contains eight missions, 17 measurable development goals and 45 indicators, representing Indonesia’s independence on August 17, 1945, to transform Indonesia into a developed country in 2045 with a gross domestic product (GDP) of $9.8 trillion or per capita income of $30,300, or 7 times more than the per capita income of $4,180 in 2021.2 

To achieve the targets, Indonesia needs not only reforms but transformations in all sectors, most importantly in its economic development, with emphasis on improving innovation and productivity of economy, accelerated energy transition, integration with global economy, digital transformation and urban development centers, including the Nusantara new capital city.

The GDP and income per capita targets, however, would only be achievable if Indonesia could book an average economic growth of between 6 and 7 percent per annum from 2025 until 2045, something not achievable in the past 20 years. Indonesia’s economic growth has been declining from an average of 5.7 percent in the period of 2005 to 2010, to 4.7 percent in the period of 2010 to 2015, and 4 percent in the period of 2015 to 2022.

The RPJPN, nevertheless, recognizes the daunting challenges Indonesia is facing to realize the Golden Indonesia 2045 vision. The challenges include a high cost economy with logistical cost amounting to 23.3 percent of GDP in 2019, as compared with below 5 percent in a developed economy; low productivity with a total factor productivity staying at minus 0.66 percent in the period of 2005 to 2019, compared with China’s 1.6 percent in the same period; a low tax ratio at 10.4 percent, below the world average of 13.5 percent; and the declining manufacturing sector from 27.4 percent of GDP in 2005 to 18.34 percent in 2022. As a result, Indonesia has been stuck in the middle-income trap in the past 30 years.

To get out of the middle-income trap and achieve the status of a developed country with an economic growth of 6 percent, Indonesia will get out of the middle-income trap by 2041. Otherwise, Indonesia will not achieve the status of a developed country by 2045. When launching the RPJPN, President Jokowi warned that the Golden Indonesian vision would not materialize without good planning and strong implementation. It needs a leader “who is brave and good at finding solutions, and who has the guts. But, don't talk about the presidential election in this forum, later in another forum.”3