The president may revamp his Cabinet as early as next month to drop ministers linked to corruption probes
JAKARTA • Indonesian President Joko Widodo (picture) plans to roll out tougher economic reforms, with the burden of elections no longer weighing him down.
The focus will now be on tackling a high current-account deficit that’s weighed on the nation’s currency, shutting down redundant government agencies and scrapping rules that hinder new investment, Widodo — better known as Jokowi — told an annual gathering of policymakers in Jakarta.
Poised to win a second five-year term in elections held last month and with Indonesia imposing a two-term limit for presidents, Jokowi is expected to carry on an ambitious US$350 billion (RM1.45 trillion) infrastructure drive that became the highlight of his first term, boost exports and investment to curb the highest current-account deficit in four years.
The president may revamp his Cabinet as early as next month to drop ministers linked to corruption probes and induct fresh faces to signal to investors his intent of fast-tracking reforms in South-East Asia’s largest economy.
“I have no burden now. I’m not thinking about next elections,” Jokowi said yesterday. “So, I will do whatever it takes for the country’s sake.”
The president warned against Indonesia getting caught in the “middle-income trap” and missing out on forecasts to emerge as the world’s fourth-largest economy by 2045.
While infrastructure to connect the thousands of islands was imperative for easy transport of goods and services, simplifying approval process for various businesses at the national and regional levels was required to draw fresh investment, he said.
The World Bank has said Indonesia’s economy would need to grow faster than 5% to escape the so-called “middle-income trap”, the phenomenon in which countries fail to evolve into high-income nations.
Under Jokowi, economic growth has averaged about 5% a year, far below the 7% he envisioned when he took office in 2014.
Some of Jokowi’s success include low inflation and unemployment rate, higher investments and sovereign rating upgrades.
The president is on course to be re-elected by a margin of about 12%, an official online tally of the April 17 votes showed.
The coalition of political parties supporting him is also likely to win about 60% of the parliamentary seats, according to the president’s campaign team.
“Majority support in Parliament will be a capital for the president in his second term,” said Andry Asmoro, chief economist at PT Bank Mandiri in Jakarta.
“One area where structural reform is needed is manufacturing and direct investment. This can come with greater coordination between the local and central governments.”
The government plans to open up more sectors to foreign investors and reboot its stringent labour laws to become a regional manufacturing powerhouse rivalling Germany and South Korea, Industry Minister Airlangga Hartarto said this week.
It will rely on automotive, chemicals and electronics industries to push the contribution of manufacturing sector to 25% of the nation’s economy by 2025 from 20% now, he said. — Bloomberg