Indonesia must use the pandemic to reboot South East Asia's biggest economy, including by improving food and energy security, as well as processing more natural resources at home, President Joko Widodo said on Friday.
Mr Widodo made the remarks in his annual state of the union speech to parliament. Due to coronavirus precautions, less than half of the politicians were present for his address, with the rest watching online.
Likening the current economic situation to "a computer crash" causing stagnation, he said Indonesia, along with other countries, must "shutdown, restart and reboot".
"We must not let the crisis bring about setbacks. In fact, we must capitalise on the crisis as a momentum to make a big leap," said Mr Widodo.
The government expects the economy to post near-flat growth this year due to the pandemic, which has infected over 132,000 people and caused nearly 6,000 deaths, the highest death toll in South East Asia. Last year, the economy grew 5 per cent.
Mr Widodo said accelerating reform of the health sector was a top priority, along with strengthening food supply chains, including with a newly planned food estate on Borneo island.
Under energy reforms, Mr Widodo highlighted plans to slash expensive oil imports by using fuel made from palm oil.
Indonesia's Pertamina produced a first batch of biodiesel made fully from palm oil last month and is set to produce 1,000 barrels of the fuel at its Dumai refinery.
The so-called D100 would absorb a minimum of one million tonnes of farmer-produced palm for 20,000 barrels of production capacity per day, Mr Widodo said, without giving a timeline.
Indonesia currently has a mandatory use of biodiesel with 30 per cent palm oil content.
The president also stressed a need to push forward the downstream processing of raw materials including converting coal into gas and nickel ore into ferro nickel and stainless steel, as part of government efforts to create jobs.
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The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
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