Indonesian President Says to Go All Out in Second Term to Boost Economic Reform

By Reuters 10 May 2019

JAKARTA—Indonesian President Joko Widodo pledged on Thursday to slim the government during his second term and cut red tape hampering investment to achieve an ambitious growth target in Southeast Asia’s biggest economy by 2045.

The president won an April 17 election based on sample counts of votes by private pollsters, but official results are not due until May 22.

“The slimmer our organization, the faster we can run, the more flexibly we can decide on policies,” Widodo said, vowing to axe government agencies that do not contribute to growth.

He was speaking to hundreds of regional leaders at the launch of “Vision Indonesia 2045,” a roadmap to becoming the world’s fifth-biggest economy, with gross domestic product of $7.3 trillion by the 100th anniversary of independence.

Widodo said he would also focus on adding infrastructure and improving human resources, in a speech that voiced frustration at Indonesia’s tortuous bureaucracy.

Despite his efforts since coming to power in 2014 to ease the path to starting a business, investors still found it difficult to enter some sectors, he added.

For example, Widodo said, his administration had cut to 58 from 259 the permits required for power plant investments, but that was still too many and he wanted the figure cut to five.

“Five years ago investors came in droves, but only a few were hatched, because we couldn’t help them execute,” he said.

“I’m so annoyed I couldn’t solve a problem that is so obvious,” he added, referring to red tape.

Aides have said Widodo will pursue bolder economic reforms in his second term, which runs until 2024, making significant improvements in the investment climate.

However, some analysts question whether he will be prepared to take on powerful vested interests and shake up a huge bureaucracy that often manages to blunt reform efforts.

Nevertheless, Widodo warned government agencies they could not stick to business as usual, at the risk of missing the 2045 target and trapping Indonesia as a middle-income country.

Achieving the target demands average annual economic growth of about 5.7 percent, exceeding the last few years’ figure of about 5 percent.

“In the next five years, I do not have any burden,” Widodo added. “I cannot run again. So anything that is the best for this country I would do.”