Joko Widodo, re-elected as Indonesia's president, must prioritise reforms including increased investment in education, health and competitiveness, says CEO of Asia Group Advisors, Adam Schwarz.
His most impressive achievement since taking power in 2014 was an overdue effort to narrow Indonesia’s yawning infrastructure deficit by adding a string of airports, ports and power stations and building thousands of miles of rural roads to connect many far-flung communities with market centres. After more than 30 years of planning, Jakarta opened its first subway in in March.
For much of his first term, Jokowi vigorously took on mountains of bureaucratic red tape that stand between investor ambitions and ready-to-go projects in Indonesia, issuing 16 packages of deregulation measures aimed at boosting investor interest.
These include setting up a one-stop shop for licensing approvals, reducing customs and port dwelling times for goods, and slimming down the number of sectors restricted from foreign investment. He also lent support to Indonesia’s able, though under-resourced, anti-corruption commission.
Expanded spending on rural infrastructure has been popular, slowing and even reversing wealth inequality. The results are apparent in global rankings.
Since Jokowi was elected, Indonesia’s ranking in the World Bank’s Ease of Doing Business index jumped from a woeful 120 out of a 180 ranked countries to middle-of-the-pack 73. In global indices measuring logistics costs and corruption, Indonesia also made concrete gains.
A major challenge for Jokowi’s second term will be finding funds to continue investing in infrastructure and improving education and health outcomes. Indonesia’s education and health metrics fare poorly relative to its main regional competitors and require massive new investments to close the gap.
(Source: Channel News Asia)