JAKARTA • Indonesia’s weakening currency is a good thing as it will spur the government to accelerate reforms to bolster the economy, according to Thomas Lembong, chairman of the Investment Coordinating Board.
The government will soon outline measures to open up the economy to more foreign investment, Lembong said at the “Bloomberg Modern Markets” conference in Bali, declining to elaborate ahead of the official announcement.
“I’m looking forward to a few breakthroughs, a few reforms that open up the economy further, even before the election,” Lembong said last Thursday.
President Joko Widodo, who is seeking a second term in April, has adopted a raft of measures to rein in the current- account deficit, which has left the nation vulnerable to the emerging-market selloff.
Indonesia’s economy is one of the hardest hit in Asia, with the currency slumping about 11% against the dollar this year.
“Very few countries or very few societies in the world are able to do reform preventively or pre-emptively,” Lembong said. “So, one upside that I see from the current market turmoil and currency pressure is, I think this is going to trigger a fresh way of reforms.”
“In Indonesia, we have this old saying that I will never get tired of, which is ‘good times leads to bad policies, bad times leads to good policies’.
This is probably true, not only for Indonesia, but for a lot of countries,” Lembong said.