Indonesia Executives List the Downturn as Their Top Concern
Jakarta, 4 December 2023 - Zurich Insurance Group published the 2023 Executive Opinion Survey (EOS) compiled by the World Economic Forum (WEF) which showed that economic downturn, including recession and stagnation, was ranked as the top risk that could pose a threat Indonesia over the next two years. This same concern is also shared at regional and global levels.
EOS 2023 was conducted between April and August 2023, gathering responses from more than 11,000 business leaders in 110 countries, including Indonesia, on the top risks that may pose a threat to their country will be faced over the next two years.
The focus on the risks of a downturn seem relevant as, while Indonesia is forecast to end 2023 with good economic growth at a level of 5.1%, the Coordinating Ministry for the Indonesian Economy disclosed that the global economic downturn and global uncertainties have the potential to challenge achieving Indonesia's growth target in 2024.
Though we are currently recovering from the COVID-19 pandemic impact, we must also prepare ourselves to face global economic uncertainty. The condition also brings uneasy business challenges, particularly for insurance industry players, who are expected to play a larger role in providing society with protection.
Chief Risk Officer PT Zurich Asuransi Indonesia Tbk, Wayan Pariama, stated, “As a supportive element in encouraging economic growth in Indonesia, business players must be able to identify potential risks and adapt to dynamic changes in society. This requires good future planning and protection in order to respond to economic uncertainty and various risks. In this case, the insurance industry's can have a significant positive impact, in order that society is protected from this uncertainty.”
Aside from the economic downturn, Indonesian business leaders and executives are also concerned about the risks from environmental issues related to extreme weather which occupies the second highest position. This is reinforced by data from the Meteorology, Climatology, and Geophysics Agency (BMKG), which showed that 2023 was the hottest year in Indonesian weather history. Interestingly, at the global level, this issue is not even in the top 5.
Through EOS 2023, it was also discovered that the issue of infectious diseases is considered the third highest risk which could create a threat in Indonesia, and in line with Southeast Asian sentiment. The issue does not appear to be without reason as in Indonesia, infectious disease awareness is still a major concern for society. Recently the Ministry of Health, through the Directorate General of Disease Prevention and Control, issued a circular regarding Precautions against Mycoplasma Pneumonia Incidents in Indonesia, after this disease caused by bacterial infections in the respiratory tract increased by 40% in children in Northern China.
Aside from the three risks mentioned above, EOS 2023 emphasizes energy supply shortages and unemployment as the fourth and fifth most concerning risks to Indonesian business leaders.
“From a global perspective, including Indonesia, economic challenges remain the main issue among the five highest risks. However, concerns over risks related to extreme weather and infectious diseases in Indonesia have spread and could impact various sectors. Given this, Zurich is ready to expand its collaborative role with numerous stakeholders, business leaders, and other associated parties to manage risks and reduce the impact on society. This is part of our commitment to creating a better future,” concludes Wayan.
EOS is conducted by the World Economic Forum’s Centre for the New Economy and Society. Marsh McLennan and Zurich Insurance Group are partners of the Centre and the Global Risks Report series.