The 1st AIFED focused on how to transform the capital inflow into investment, especially in infrastructure financing through sound fiscal policy. Furthermore, the best strategy were suggested to address the challenges how to minimize the risk on financial instability. Inviting many speakers from ASEAN countries and international agencies, this conference was enriched by the discussion from theoretical framework and international best practices. This conference addressed five core area of fiscal policy, such as direction of fiscal policy, policy of tax incentive, policy of tax revenue and non-tax revenue, budget allocation, and social security implementation.
The strategy to address the challenges to maintain stability to promote economic growth was discussed in this conference. Effective crisis management and inter-agency coordination were trusted to address macro, monetary, and financial stability to achieve the development targets. The 2nd AIFED covered the important role of policy coordination and institutional arrangement in promoting financial stability. This conference also provided international best practices of crisis management and discussion of the framework strategy to prevent crisis prevention and resolution. The conference was followed by the workshop on macro-financial indicators and early warning exercise for effective surveillance.
Focusing on the inter-related issues of productivity growth and income inequality, 3rd AIFED aimed to raise awareness on the risks of a potential middle income trap for Indonesia and inform policy-makers, influential thinkers stakeholders about various policy options and strategies that Indonesia can pursue in short and medium-terms to avoid the middle income trap which achieving its objective of inclusive and equitable growth. This conference discussed the key determinants of growth decelerations for middle-income economies and the middle income trap, the trend and dynamics of productivity growth in Indonesia, and the state and nature of income inequality in Indonesia and how it evolves as the income levels rise.
Following the last year conference, 4th AIFED focused on concrete recommendations for policies and implementation, constructing the best growth strategy and policy reforms to achieve inclusive growth. The specific problem which were discussed included the type of growth strategy to set the economy on a rising trajectory of robust and inclusive growth, and the specific investment, policy and institutional reforms which are necessary to facilitate the successful implementation on this growth strategy. The conference also discussed the prioritization and sequencing of these policy reforms. With keynote speakers the Nobel Memorial Prize in Economic Sciences 2001 winner, Joseph E. Stiglitz, this conference has succeeded addressing issues with clear focus on identifying concrete and feasible policy options for Indonesia to achieve equitable and sustainable growth path over the next five years and beyond.
Focus on the role of fiscal policy in escaping the middle income trap, Indonesia should elaborates the fiscal policy in pursuing development objectives, including the revenue-spending sides and how government should address the challenges of financing the budget. 5th AIFED aims to exercise and identify the appropriate revenue, expenditure and financing policies needed to support longer term growth and avoid the middle income trap. The discussion focused on the role of fiscal policy in meeting development objectives, especially in the evolution of fiscal policy post GFC environment and, revenue reform which generates higher and sustainable revenue without sacrificing economic growth. The conferenced also discussed spending allocation and priorities, and financing, including government finance’s constraint and the role of financial deepening.
Enhancing the role of financial sector to support and finance its enormous investment needs, this year’s conference will look at some of the key issues and learn to take some important policy direction. The objective of 6th AIFED was to look at the international experience, in designing financial sector policies to support rapid and sustainable growth and avoid the middle income trap and to come up with policy recommendations. This conference covered international evidence on how to mobilize and utilize savings more productively to finance investment and meet development objectives, debottlenecking of the long-term financing challenges for strategic sectors of the economy, particularly infrastructure, by optimizing the role of financial system, and the trade-off between allowing financial system innovation and stability and development given the current challenges in emerging markets.
This conference covers the issue of technological change in the manufacturing sector and the development of the digital economy.
Innovation is the main theme in the seminar. It is a key to reap the benefits of technological changes, including to address productivity and equality issues.
The discussion on manufacturing sector put forward how technological change comes with both potentials and adverse impacts. Policy development needs to become more forward-looking to catch up with technology. Some policy ideas to capture the potential of technology are to accelerate infrastructure development, improves regulations and business climate, and supports greater trade integrations.
The discussion on digital economy agreed that technology creates jobs that mostly high skilled. The discussion leads to a recommendation on areas of action which include strengthening economic capacity, protecting workers through social protection, promoting education in science, technology, engineering and mathematics, and allocating tax revenues into productive accounts (infrastructure, education, research).
AIFED is a Fiscal Policy Agency annual event that brings together policy makers, economists, academics, and private sector to discuss various key economic and development issues particularly for Indonesia. To upgrade itself to be a more prosperous country and escape from Middle Income trap, Indonesia should redesign its development strategy that will capitalize its potentials (demography trends and digitization) while tackling the structural challenges that has hampered growth (e.g. infrastructure gaps and limited domestic financing source). In the 8th AIFED, the structural economic transformation of Indonesia will be explored in the context of changing global landscape.