Macroeconomic stability is necessary for SDGs


Sustainable development goals (SDGs) are a set of development targets aimed to be achieved in 2030. It is a long-run target. However, history has proven that short-run macroeconomic volatility can have detrimental effect to these long-run aspirations. Consider te 1997/1998 Asian Financial Crisis (AFC). AFC damaged the decades of success of Indonesia’s poverty reduction over night, created massive unemployment. Moreover, AFC started a stagnation in the labor absorption from low-productivity sector (such as agriculture) into higher-productivity ones (manufacturing) and in-so-doing, interupted Indonesia’s long-term structural transformation. Some experts believe it has contributed to Indonesia’s premmature deindustrialization, happening at this very moment.

Some studies also says that a period of macroeconomic downturn tend to be followed with faster liquidation of natural resource assets. Global economic fluctuations, such as in world commodity prices are also correlated with income inequality.

These add relevance to careful monitoring of macroeconomic indicators by policy makers, planners and all relevant actors in a country’s development including Indonesia. One way of improving such monitoring is a reliable, up-to-date, and credible macroeconomic dashboard.

In a seminar held on Monday, 7 September 2016, SDGs Center, Universitas Padjadjaran, a team of macroeconomic planner from Ministry of National Development Planning (BAPPENAS) presented recent work on such an endeavour. Bappenas Economic Dashboard aims to provide a picture of the most current condition of Indonesia’s and global economy; provides a warning if some indicators reach a level inconsistent with annual or their medium terms target; provides a forecast for several relevant indicators; provides a tool to improve economic decision making.

The presentation was complemented by comments from economists from Padjadjaran University, including Dr. Achmad Kemal Hidayat (Director of Ph.D program in economics), Dr. Rudi Kurniawan (Secretary of Masters program in Applied Economics) and Dr. Arief Anshory Yusuf (Executive Director of UNPAD SDGs Center). The seminar was moderated by Dr. Achmad Maulana, Senior Researcher at UNPAD SDGs Center.