Lessons in Economic Recovery and Resilience Creation
Indonesia is one of the countries the coronavirus hit hardest. In 2020, its GDP dipped to -2%; in 2021, the figure stood at merely 3.7%. How, then, could Indonesia’s GDP grow to 5.4% this year—a figure even higher than its GDP peak in 2019, just a year before the pandemic? At the Bloomberg CEO Forum, where prominent leaders from public and private sectors gathered to discuss economic and development policies, revealed some answers to this puzzle.
SUPPORTS FROM THE FINANCIAL FRONT
The number of underbanked population in Indonesia is a significant issue. According to FinTech News magazine, this figure spiked to 51% during the pandemic in 2021. At the Bloomberg CEO Forum, representatives from some of Indonesia’s most prominent financial institutions explained how the financial sector was one of the key players in alleviating this situation. First, with the public sector’s cooperation, legal hurdles were removed, which resulted in more relaxed regulations on fintech and microfinance services. Then, the private sector stepped in, implementing big data technology to calculate risk, creditworthiness, and repayability. This allows Indonesian banks to pinpoint and directly market to an audience within the underbanked industry that had the potential to become quality borrowers. As word-of-mouth resulted in more penetration toward the said sector, the economy of scale came. Banks could acquire capital at lower costs, making operations cheaper. The result: more than 11 million Indonesians were lifted out of the under-banked status, funneling millions of Rupiah back into the market. This directly contributed to the increase in GDP.
STRENGTHENING THE PEOPLE’S ASPECT
The CEO Forum also discussed how Indonesia strengthened people’s resilience via healthcare empowerment. The key here was to leverage digital technology to improve well-being holistically. With the public and private sectors’ cooperation, technology firms created a nationwide health data platform for citizens. The platform, in turn, informed public health officials when irregularity (such as a spike in infection or health abnormalities) arose, allowing timely corrective actions. This system also benefitted personal health: Indonesians can diagnose symptoms quickly, obtain prescriptive drugs, and make doctor’s appointments from their mobile devices. This reduces processing time in hospitals and creates health and well-being accessibility. If a new pandemic were to come, the country and its people would be more prepared: the economic impact of the new virus could be reduced, and the disease would be combatted more efficiently.
How Indonesia improved its economic situation can be a case study for the world. One can see that when tackling problems, efforts must be made on a broad front—encompassing wealth creation (financial well-being) and people’s resilience (better health). Altogether, this means a GREATer and more sustainable society.
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