President Jokowi looks to make Indonesian economic growth his final legacy
Indonesian President Joko ‘Jokowi’ Widodo will be sworn in today.
After gaining 55.5% of the vote on April 17, Jokowi’s final term will focus on economic growth. He is insistent that Indonesia—Southeast Asia’s biggest economy—meets its 7% GDP growth target. Following Jokowi’s failure to achieve this goal in his first term, he is turning to spending.
The president has already announced a $400 billion plan to build power plants and an airport. Jokowi hopes to raise 35% of the funds from the private sector—to do so, he will need to address bureaucratic road blocks. Indonesia ranks 73rd on the ease of business scale. Corruption is rampant and many areas of the economy are off limits to foreigners.
With global demand weakening as the US-China trade war rages on, Jokowi is reshuffling his economic team to lead his investment agenda. Sri Mulyani, Indonesia’s current finance minister credited with elevating Indonesia’s credit ratings, is rumoured to become the Coordinating Minister for Economic Affairs.
As spending is often the easiest way to boost GDP growth, expect major construction projects. While this will increase Indonesia’s business attractiveness, Jokowi’s effectiveness at reducing red tape will have more impact on growth.
