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OECD ECONOMIC SURVEYS: INDONESIA 2024
Indonesia: Stronger productivity, digitalisation and green transition will be key
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Indonesia's GDP growth is projected to remain robust, at 5.1% in 2024 and 5.2% in 2025. To maintain high levels of growth, the country needs to further improve the environment for productivity growth, reap further gains from digitalisation and continue advancing towards net-zero emissions.
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Public support for agriculture is not sufficiently directed at innovation, productivity and sustainability goals
Transfers to the sector have declined in 2022 and 2023 relative to their peak in 2021, but remain significantly above levels seen just before the COVID-19 pandemic and are still not sufficiently directed at critical innovation, productivity and sustainability goals.
Total support to agriculture averaged USD 842 billion per year during the 2021-23 period. Support remains concentrated in a few large economies, with China, the United States, India and the European Union representing 37%, 15%, 14% and 13% of the total respectively.
The share of estimated support dedicated to general services such as innovation, biosecurity or infrastructure averaged only 12.6% of total support in 2021-23. While it has been fairly stable since 2020, this share is well below the 16% seen at the beginning of the 21st century. These services are key elements in countries’ efforts towards sustainable productivity growth.
To encourage innovation, governments are developing strategies and frameworks, investing in research and development , strengthening institutions, enhancing agricultural knowledge as well as innovation systems, and providing targeted incentives to producers to develop and adopt new production methods. Reorienting support could benefit such efforts.
