Indonesia - Economy - 100 Days Of President Widodo
Published 3 February 2015
© Crown copyright 2015
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/indonesia-economy-100-days-of-president-widodo/indonesia-economy-100-days-of-president-widodo
This publication was archived on 4 July 2016.
This article is no longer current. Please refer to Overseas Business Risk -Indonesia
Summary
President Widodo marked one hundred days in office on 28 January.
Detail
###The Economy…
Widodo put the economy front and centre of his electoral campaign. His team have taken decisive action to restructure fuel subsidies, bringing these down from 20% of the budget to 6%; and begun the tough battle against entrenched interests and corruption in the energy sector, appointing reformist leaders to the Energy Ministry and the upstream oil and gas regulator. The government is tackling barriers to investment, for example creating a ‘one stop shop’ to process 134 groups of licences in 1249 investment areas, and revising regulations on Public Private Partnerships. And the government has set out ambitious infrastructure plans to address Indonesia’s serious logistics and transport bottlenecks. Much of the £9.3bn saved from fuel subsidies is going to infrastructure and social programmes. But it continues to advocate adding more domestic value to Indonesia’s exports.
Overall, market reactions have been positive. The rupiah is stable. Businesses showed higher confidence across a number of indicators, including optimism that the new administration will address infrastructure needs; activity that will open commercial opportunities for UKTI’s High Value Opportunities Programme. Further reforms will be needed to raise growth from 5.2% this year (estimated by the World Bank) to 7%, the President’s target.
… And Other Domestic Priorities…
Meeting a key campaign pledge, Widodo launched a free health insurance scheme for the poor. He has also introduced a range of free education options and scrapped roll-out of a controversial new curriculum, which reduced English and science tuition. The creation of a combined Ministry of Higher Education and Research should improve the quality of research and bodes well for collaboration in the long term.
Widodo has taken his new broom to the Forestry Ministry combining it with the Environment Ministry. The Minster suspended all new natural forest logging and delegated the power to grant licenses on state forest land to the Investment Coordination Board in an effort to ensure better integrated land use planning. One of Widodo’s first trips outside Jakarta was to fire-damaged Riau where he dammed a peat drainage canal and declared this ecosystem a no-go area for further development.
The Government has a minority in Parliament. However, Widodo has successfully fought off efforts to scrap direct elections for regional leaders and is on course to win support for the revised 2015 budget.
Disclaimer
The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.