September 9, 2026 | 11:06 pm
TEMPO.CO, Jakarta - A new study by the Asian Development Bank Institute (ADBI) reveals that Indonesia is still relatively far from escaping the middle income trap, with a probability score of 0.44 compared to the threshold of 0.6, according to ADBI CEO Bambang Brodjonegoro.
At a joint conference with the Ministry of Development Planning in Jakarta on Wednesday, September 9, 2026, as quoted by Antara, Bambang presented the results of a machine learning-based analysis that identifies factors contributing to a country's ability to achieve high-income status.
The analysis compared two machine learning models: XGBoost and Elastic Net. The results of both models indicate that structural transformation, institutional quality, and political viability are the three pillars with the greatest contribution to the predictive power of a country's ability to escape the middle income trap.
According to him, these three pillars contribute more than 73 percent of the model's predictive power alongside other factors, including human capital, innovation, fiscal capacity, and state capacity.
"Unfortunately, Indonesia, Thailand, Vietnam, the Philippines, Cambodia, Myanmar, India, and other countries still face challenges because the probability of escaping the middle income trap is far from the threshold," said Bambang.
Indonesia's score also lagged behind several other countries, including Thailand, which scored 0.56, while Vietnam scored 0.50.
"So, I can say that these countries are in a borderline position. There is a possibility of escaping the middle income trap, but it's not yet a certainty," he said.
Meanwhile, other Asian countries such as Japan, Singapore, and South Korea recorded very high probability scores of escaping the middle income trap, at 0.97, 0.95, and 0.91, respectively, before transitioning to high-income countries.
According to Bambang, Indonesia must strengthen domestic capabilities and ramp up productivity to raise domestic added value as part of its efforts to escape the middle income trap.
Indonesia's basic capital has so far relied on natural resources, thus, the country must strengthen its resource base through deepening manufacturing, developing domestic suppliers, attracting technology-oriented foreign direct investment (FDI), enhancing skills and innovation, and participating in regional value chain integration.
Furthermore, policy consistency is deemed crucial to support Indonesia's structural transformation toward high-income country status.
Read: Indonesia Targets 3.49 Million Job Creations in 2027
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