Election Year Economics: Understanding Indonesia’s Development Challenges in 2024 (Part-4)

By: Dr. Mohamad Ikhsan Modjo (Financial Economic Specialist’s BINUS International Finance Program)

Meanwhile, the latest Human Development Index (HDI) for Indonesia is 0.7439, placing Indonesia in the medium human development category. Improvements in the HDI indicate significant achievements in Indonesia’s development in the health, education, and income sectors.

In this regard, there are still some notes such as issues in the gender field seen from the difference in HDI for men and women in Indonesia. This indicator is also confirmed by the gender-based violence survey in Indonesia from UNFPA (United Nations Population Fund), which shows that 41% of Indonesian women have experienced one or a combination of physical, sexual, emotional, and economic violence during their lifetime, where 16% of them experienced this violence in the past year. On the other hand, several government programs to reduce gender inequality have also achieved many results, as seen from the increase in the Global Gender Gap Index for Indonesia, indicating improvements in gender inequality in the four main fields of education, health, economy, and politics.

Another equally important challenge to be adequately addressed in 2024 is in the field of democracy and governance. During 2023, there was an increase in corruption crimes, systematic violence, as indicated by the decrease in the latest Indonesian Democracy Index (IDI). The largest decreasing component in the IDI is in the component of democratic institutions, as well as freedom of opinion and belief, and freedom from discrimination. The decrease in this index also generally indicates an increase in social tension in society.

One of the causes of the increase in social tension is suspected to be the simultaneous activities of the presidential and legislative elections in 2024, which have resulted in increased tension between religions, ethnicities, and various political groups in Indonesia. This tension will continue with the upcoming simultaneous regional elections in several areas, including some major provinces. This trend of tension needs to be addressed to dampen the potential for social conflict and an increase in extremist actions that could undermine Indonesia’s reputation as the third-largest democracy in the world.

In conclusion, the Indonesian economy is predicted to grow by about 5.1 percent in 2023, with domestic consumption remaining the main driver. Implementing several policies in the social, cultural, environmental, and infrastructure sectors outlined above will begin to be felt and strengthen the foundations of development in Indonesia in 2024. Some challenges related to development financing will largely depend on the government’s efforts to encourage and facilitate efforts to obtain financial instruments and alternative development financing carried out by various parties. Meanwhile, the escalation of social tension due to the simultaneous 2024 general election must be anticipated by maintaining bureaucratic neutrality and impartial law enforcement.