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Medan, Indonesia Indonesia is at the “top” of international leadership and its economy is strong enough to withstand global headwinds, Indonesian President Joko “Jokowi” Widodo said in an annual speech to parliament.

Striking an upbeat tone ahead of Indonesia’s 77th independence day on Aug. 17, Widodo said Tuesday that the country’s economic fundamentals remain strong “amid global economic turbulence” and that “crisis after crisis haunts the world “.

Addressing the issue of rising prices, the Indonesian leader said inflation had reached 4.9 percent in July, compared with 7 percent in the Association of Southeast Asian Nations (ASEAN) and 9% in developed countries.

Widodo said the Southeast Asian nation has also seen its stature grow on the international stage as a result of its current chairmanship of the G20 and next year’s chairmanship of ASEAN.

“It indicates that we [are at the] pinnacle of global leadership,” said Widodo, who wore a traditional Paksian dress of moss green and gold from the Bangka Belitung Islands.

‘confident’

Deni Friawan, an economic researcher at the Center for Strategic and International Studies (CSIS), called the speech “very optimistic and confident.”

“This optimism is good for inviting public participation, but it can also be dangerous and there is a fear of overconfidence,” Friawan told Al Jazeera.

Friawan said that while Indonesia’s economic fundamentals appear to be strong compared to other countries, the picture has been distorted by government interventions to control sharp rises in commodity prices.

“Inflation and exchange rates are holding up at the moment, but the cost of doing that is also expensive,” he said. “Inflation is low because we do not make fuel price adjustments, but energy subsidies have increased to IDR 502 trillion ($34 billion).”

Like much of the world, Indonesia has faced supply chain issues caused by a combination of factors, including the war in Ukraine and high consumer demand following the COVID-19 pandemic.

In his speech, Widodo said Indonesia’s rising international status extends to growing interest in its downstream industries, which involve processing abundant raw materials such as crude oil and nickel to allow the export of more expensive finished products.

Widodo said Indonesia’s economy grew by 5.44 percent in the second quarter of 2022, with a surplus of about IDR 364 trillion ($24 billion).

Steel exports reached IDR 306 trillion ($20.7 billion) in 2021, an 18-fold increase compared to 2016, and are forecast to reach IDR 440 trillion ($27 billion) by the end of 2022, the Indonesian leader said.

Friawan, the CSIS researcher, said the government’s focus on downstreaming has had questionable results.

“The president only sees the success of downstream nickel from the point of view of increasing investment and steel exports, but not carefully calculating the added value that Indonesia actually gets,” he said.

“Note that having a lot of natural resources does not mean that Indonesia can be competitive for industrial and manufacturing production based on the input of natural resources. To be competitive, you also need technological support, skills, capacity and economy of ladder”.

Widodo also referred to his legacy project of Nusantara, Indonesia’s new capital in Borneo. The project, which aims to raise 80 percent of its funding from private concerns, has been controversial, with some critics saying it will displace indigenous peoples and could centralize power in ways that may be unconstitutional.

“What is interesting in my view is that Jokowi remains committed to carrying out this big project amid the uncertainty of the economic situation, both at home and abroad,” Siwage Dharma Negara, a senior researcher at the Institute, told Al Jazeera Iseas-Yusof Ishak.

“The president remains optimistic about our economic ability to rise from the pandemic, although he advises that we must be vigilant and cautious with conditions that are very uncertain.”