Economic growth must be supported by investment: ADB

Jakarta Asian Development Bank (ADB) Vice President Bambang Susantono highlighted that economic growth during the pandemic not only relied on consumption and support from government spending but also on investment support to enable economic recovery.

At a webinar titled “Great Reset and Future Prospects” here on Wednesday, Susantono stated that the country must be able to survive and emerge from economic recession during the pandemic by driving economic growth through investment.

However, the ADB vice president reminded that in order to draw investment, every country must compete, so that investors are willing to invest.

“The state needs to strive to attract as much investment as possible and not only rely on consumption and government support,” Susantono emphasized.

The vice president pointed out that amid a pandemic that has triggered economic recession in several nations due to restricted mobility of the people, each country is highly dependent on support from government spending to maintain economic growth.

However, support from government spending requires a special budget, thereby leading to budgets in several countries, especially in the Asia Pacific, to slide into deficits.

This situation has triggered several countries to seek new funds and led to an increase in debt.

“As a result, the government’s debt is rising. Of course, there is no other way,” Susantono remarked.

However, the ADB vice president encouraged the state to exercise caution in managing the debt ratio in order to remain sustainable and called to not create too heavy a burden that could lead to the economy collapsing.

Expert Staff for Macroeconomics at the Investment Coordinating Board (BKPM) Indra Darmawan noted that the government’s focus in 2021 is on three areas: improving public health, continuing the workforce program, and implementing the Job Creation Law.

The government needs to push the implementation of the Job Creation Law in order to boost investment in the country through various clusters, one of which is by running an Investment Management Institution that will absorb several funds and utilize it for development and encourage economic growth.

Source: Antara News

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