Sunday, 23 February 2020 | 14:16 WIB

Bank Indonesia: These Two Factors Affect National Economy

Bank Indonesia: These Two Factors Affect National Economy (bankindonesia)

JAKARTA, NETRALNEWS.COM - Bank Indonesia (BI) Governor Perry Warjiyo has warned of the phenomenon of shrinking globalization, but on the other hand digitalization has accelerated. Therefore, these two paradigms will affect the future development of the Indonesian economy.

"The dynamics of the global economy and finance that we face today are diminishing globalization, and rising digitalization," Perry Warjiyo said during the National Seminar of the Bogor Institute of Agriculture Business School (IPB) in Jakarta on Saturday (11/01/2019).

According to Perry, at this time there is a decrease in the urge to do globalization, but at the same time, there is a movement of digitalization acceleration.

The BI Governor explained that at this time there is a tendency for global trade to be directed more domestically, in contrast to previous thinking which encourages more trade and investment between countries.

At this time, he continued, the antithesis of globalization has implications such as a trade war between the United States and China.

"This is a reflection of anti-globalization from developed countries. They cannot compete with cheap products of developing countries," Perry said.

For this reason, he said, the big question was how national economic stakeholders could remain relevant.

This, Perry continued, is to look for new economic resources that have not yet developed and are not yet well worked out at home.

Previously, Center for Indonesian Policy Studies (CIPS) Researcher Pingkan Audrine Kosijungan stated that pro-investment policies if truly implemented consistently by the government would suppress the potential for recession due to the current global uncertainty phenomenon.

"The government needs to continue to improve pro-investment policies to encourage the entry of foreign direct investment into the country," Pingkan said in Jakarta, Thursday (10/31), reported by Antara.

Pingkan reminded that the Organization for Economic Cooperation and Development (OECD) revised global economic growth from 3.2 percent to 2.9 percent. Previously the same thing had been done by two other world financial institutions, namely the International Monetary Fund (IMF) and the World Bank.

According to Pingkan, the revision of the global economic growth forecast seems to have been very clear as a result of the volatility of the market conditions amid the global economic turmoil.

"Geopolitical tensions and some of the factors mentioned before did indeed move very dynamically in the first half of this year, causing international economic agencies to re-project based on the development of the existing situation. This also reinforces the premise of a global recession in the near future," Pingkan explained.