Sunday Special : Bonus Demography

Global population has grown by an estimate of 24.7%  in the past two decades. Population growth and management has always been a well debated subject in economics and urbanization as resources are scarce and the global population keeps on growing. However, population growth does not necessarily have bad implications if it is managed properly and capitalized to further a country’s development. Population growth can be the key for a country to excel in rapid development if the government takes the right steps. Bonus demography is a phenomenon in which a country’s productive age population exceeds the non-productive population. 

When bonus demography occurs, the productive population between ages 20-65 exceeds dependents which can be utilized as a way to capitalize on a country’s economic development. Rapid urban developments of infrastructure and trade is made possible by the overflow of manpower. Indonesia has the 4th largest population in the world next to the United States. However, where the United States is going through stagnant growth meaning the number of dependents is around the same as the number of productive people, Indonesia has an opposite phenomena. We can see that based on the trends of countries that have experienced a bonus demography, a significant infrastructure reform was done to accommodate for economic growth. 

As an example of this belt and road construction to further trade. This can be seen in China where a belt and road initiative was started during their bonus demography era which allowed for ease of foreign trade and mobility within the country. Population growth was a big problem in China but due to policies enacted by the government to manage scarce resources China was able to capitalize their bonus demography for infrastructure growth. We are categorized under the expansive style of development which means our productive age group keeps going larger. As Indonesia is an archipelago with many areas that can be developed, the growing population is an opportunity to further development around Indonesia and out of Java island. 

Development in Indonesia is known to be ‘Java-centric’ as in the colonial days the island was used as the main Island by Dutch forces. Moreover, after independence Jakarta became the capital of Indonesia and being in Java, much of the development in Indonesia is centralized in the one Island. Many large provinces are not equipped with resources to grow and develop with financial and manpower limitations. Being a developing country with limited resources, we have always focused development of infrastructure mainly in Java which in result slows down growth in the rest of the nation with a high level of inequality. With the demographic bonus, it would be a good strategy to further development outside of Java. 

Expanding development out of Java would make it easier for Indonesia to capitalize the ample amount of natural resources with a functioning ecosystem of trade, belt, road and equipment. Indonesia is on the brink of greatness and what the government does next will determine how well Indonesia develops in the next 50 years. With the ample amount of natural and human resources, we have the potential to become an economic powerhouse. The government simply lacks the ability to manage these resources properly leaving little room for current development. 

Indonesia is currently in the beginning stages of entering this bonus demography phenomenon which is estimated to peak in productivity by 2030. In recent years, the government under Jokowi’s administration has managed to enact policies that focus on infrastructure development and economic growth. Business partnerships with foreign countries have also increased alongside Indonesia investing in local startups and small businesses. The combination of all these developments have placed Indonesia in the eyes of the international community as we continue to positively develop. Jokowi’s administration has managed to build a social security, public transport and trade infrastructure which will be furthered if the next president manages these projects wisely.

Moreover, policies that have been enacted are targeted towards the development of infrastructure and economy which has allowed Indonesia to stand in the pivotal point it is in today. The decisions made by the future 2024 administration will determine how well or poorly the bonus demography will be capitalized for economic development. This means that Indonesia has the potential to be an economic powerhouse between the years of 2030-2040 when bonus demography is estimated to peak. The strategy the government utilizes to manage resources and continue enacting successful developmental policies will be detrimental to the growth of Indonesia’s economy. 

What can we do as someone in the productive age? 

  1. Vote - It is crucial to vote for a leader that has the agenda to guide Indonesia to becoming an economic powerhouse especially with the constraints and limited resources available. As a citizen within the voting age it is your duty to take part in the upcoming 2024 elections and use your voice to choose a prospective leader that can grow the seeds planted by the Jokowi administration and lead Indonesia to a path of rapid economic development.

  2. From a consumer perspective, continuing to support local brands and businesses will allow for an expansion in corporations and job markets. This will allow for more workers in the productive age to be employed causing an overall economic expansion. Moreover, with demand comes supply, which means that a demand for local products will only spark an expansion in local businesses. 

  3. Find opportunities and innovations in the private sector. As a rapidly developing country, Indonesia is in the age of start-ups and new businesses that are breaking into new sectors, innovations and businesses. Opportunities for employment or even a specialization will be needed with the emerging businesses. If you have a niche license, specialization or professional degree, it would be beneficial to be on the look out for these opportunities especially when new sectors emerge.

  4. Be on the look out for new developmental policies especially when there are government projects and programs as a result of these policies. When new policies are enacted, projects and programs are usually created to fulfill the policy. This results in an increase of jobs and also prospective contracts for government work. 


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43RD ASEAN SUMMIT