China's 'new normal' of moderate growth is a top concern for Indonesia as it implies downward pressure on commodity prices, the country's finance minister said.
Southeast Asia's largest economy has been hit amid falling commodity prices and slowing consumer spending. Commodities – including nickel ore, tin and thermal coal – account for around 60 percent of Indonesia's exports.
"We can't continue to rely only on natural resources or cheap labor. It's time to focus on quality of human capital, improve infrastructure, governance – with this we'll promote growth," Chatib Basri told CNBC on the sidelines of 2014 IMF/World Bank annual meetings in Washington DC.
The economy grew 5.8 percent in 2013, its slowest pace in four years and the first sub-6-percent expansion since 2009. It's forecast to grow around 5.2 percent this year.
Can Indonesia grow at 6.5% again?
Asked when Indonesia will return to 6.5 percent growth, Basri says not before 2017.
"I think 2014-2015 we need to choose strategy stabilization over growth – if you're talking about 2017 – I'm quite optimistic the economy will grow higher than 6 percent," he said. The economy last grew at 6.5 percent in 2011, before moderating to 6.2 percent in 2012.
Infrastructure spending could propel growth, he said.
"If the government can relocate money from fuel subsidies to infrastructure, within three years we'll have infrastructure projects that will promote growth," he said.
Fuel subsidies have long dogged Indonesia, contributing to its current account deficit and crowding out other government spending.