As Indonesia’s three presidential candidates gear up for the start of the official campaigning period beginning on Tuesday, they face the challenge of turning around slowing growth in Southeast Asia’s largest economy.
Defence Minister Prabowo Subianto, former Jakarta governor Anies Baswedan, and ex-Central Java governor Ganjar Pranowo will face off on February 14 to succeed President Joko Widodo, who is constitutionally barred from running after two terms in power.
Indonesia’s gross domestic product growth slowed to 4.94 percent in the third quarter, compared with 5.72 percent during the same period in 2022, according to government data.
Indonesia’s economy grew 5.3 percent for the whole of 2022, the biggest expansion in nine years, as the resource-rich country rode a global commodities boom.
Economic experts say that maintaining GDP growth at above 5 percent will be essential to creating enough jobs for the one million-plus Indonesians newly entering the workforce each year.
Indonesia’s economy added an average of 2.4 million new jobs each year between 2009–2019, according to the World Bank.
Indonesia’s unemployment rate in August stood at 5.32 percent, down 0.54 percentage points from the previous year, according to official figures.
Ganjar and his running mate Mahfud Mahmodin, known as Mahfud MD, have pledged to create 17 million new jobs, with a particular focus on the nation’s youth.
His “Quick to Get Work” initiative includes plans to scale up vocational training and expand free education from the current 9 years to 12 years.
“Indonesian youth need to quickly find jobs or be given the ease to create their own businesses to become entrepreneurs,” Arsjad Rasjid, campaign chief for the Ganjar-Mahfud ticket, told Al Jazeera, warning that the country’s demographic bonus could become a catastrophe if not handled properly.
Arsjad said greater industrialisation and education would be the only way to meet the population’s job needs.
“For every low-income household, we want to have at least one university graduate in the family to lift them out of the poverty trap,” Arsjad said.
Arsjad Rasjid says the Ganjar-Mahfud ticket is focused on job creation for the young [Amy Chew/Al Jazeera]
Anies, the former Jakarta governor, has stressed the need to more equally distribute the benefits of the country’s abundant natural resources.
Widodo, popularly known as Jokowi, made “downstreaming” a cornerstone of his economic policy by spearheading legislation to ban the export of minerals and mandate that commodities mined in the country be processed domestically.
Indonesia’s nickel-related exports jumped from about $6bn to $30bn from 2013-2022 on the back of higher value-added products such as stainless steel and battery materials.
Anies’ spokesman and economic policy adviser Tom Lembong said that the mining sector had widened the divides between the rich and poor as well as developed and less-developed regions.
“Indonesia’s economic growth has become dominated by a narrow segment of industries, mostly linked to commodities such as coal mining, nickel mining and smelting, and palm oil,” Lembong told Al Jazeera.
“Because commodity sectors are capital-intensive, it’s mostly the rich, the owners of capital, who have benefitted from our commodity-driven boom.”
Lembong said Anies would embrace previously neglected growth opportunities such as labour-intensive industries and the service sector, and put economic growth on a “more diversified and sustainable footing”.
“One example of Anies-Muhaimin’s urbanisation-led growth strategy is to focus on at least 14 cities around Indonesia, to each becoming a more dynamic growth engine for the regions around them,” Lembong said.
Prabowo’s campaign team did not respond to a request for comment.
In their election manifesto, Prabowo and his vice presidential nominee Gibran Rakabuming, who is Jokowi’s eldest son, have pledged to continue with Jokowi’s downstreaming policy and investment in infrastructure.
“In principle, we need to maintain free trade. But there is another principle that is very important for us, namely the principle of a level playing field. [Processing] raw materials [in Indonesia] is our right for our people to want to be as advanced as you … ,” Prabowo said last week at a Center for Strategic and International Studies (CSIS) forum.
Prabowo’s manifesto also pledges to continue developing rural areas, providing direct cash aid and building low-cost homes.
Defence Minister Prabowo Subianto has pledged to continue Jokowi’s downstreaming policy [File: Willy Kurniawan/Reuters]
Both Prabowo and Ganjar have pledged to finish Widodo’s plans for a new capital city on Borneo, while Anies has not mentioned the project in his manifesto.
Alexander Arifianto, senior fellow at Singapore-based S Rajaratnam School of International Studies (RSIS), said Prabowo and Ganjar had laid out relatively similar economic policies.
“For instance, their macroeconomic and industrial policy, with both pledging to retain Jokowi’s ‘downstreaming’ industrial policy, particularly in the mining and oil and gas sectors,” Arifianto told Al Jazeera.
But Ganjar is likely to favour more state ownership due to his Indonesia Democratic Party of Struggle party’s history of favouring economic nationalism and state-owned enterprises, Arifianto said.
Fajar Hirawan, senior economics researcher at the Jakarta-based Centre for Strategic and International Studies (CSIS), said the new president should diversity foreign investment to “maintain geopolitical neutrality, hedge against risks in case one investor country experiences issues and cannot invest, produce or work with Indonesia any longer”.
Fajar said the next president would also have to address environmental sustainability, workforce development and welfare policy.
“Meeting sustainable agriculture and industrial standards will determine whether Indonesian exports will be competitive and welcomed in world markets,” Fajar said.
Fajar said the candidates should also be aware of the potential for the Israel-Hamas conflict to spread to other regions in the Middle East.
“As a net importer of oil commodities, for sure all candidates should be aware of this situation. They should anticipate the possibility that the conflict might be prolonged and will impact global and domestic economies, putting pressure on inflation, mainly coming from energy and food commodities,” he said.
University of Indonesia economist Fithra Faisal Hastiadi said that inflation is a major concern for lower income earners and a “realistic” economic growth target would be 5-6 percent.
“For people in the bottom 40 percent of income earners … this (inflation) rate is not affordable … (therefore) jobs and prices are viewed as their top priorities,” Fithra told Al Jazeera.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
