Indonesia yesterday announced a raft of measures to prop up economic growth, support the rupiah, help the poor and reduce regulations for local and foreign investors.
The measures are aimed at simplifying procedures for business, stabilising inflation and keeping people in their jobs.
To boost the competitiveness of national industries, at least 89 regulations are being revamped to cut red tape, said President Joko Widodo at the Istana last evening.
"This is aimed at eliminating duplication, strengthening coherence and consistency, and removing
irrelevant regulations that hinder competitiveness," he added.
Flanked by his economic team and heads of state-linked financial agencies, he said this was the first instalment of measures to be announced and would take effect immediately or within the week. The second set of measures would be announced by the end of the month.
Indonesia's economic growth has plunged to six-year lows and the rupiah has continued to weaken, defying Mr Joko's ambitions of firing up the economy to boost job growth and investment, fuelled by massive infrastructure investment.
While the President remains optimistic about hitting 5.2 per cent growth this year, economists have cast doubt on this target by citing the global slump, coupled with reform plans that are hampered by the slow rate of infrastructure spending. Cumbersome bureaucracy, tensions among government agencies and Mr Joko's struggle to overcome political rifts have all conspired to stymie his goal of an investment revolution.
Among the new measures, Trade Minister Tom Lembong told The Straits Times he scrapped a heavily criticised law requiring a letter of credit for exports of selected natural resources, four months after it was enforced.
Mr Lembong, who took over the portfolio after a Cabinet reshuffle last month, said there "would be whoops of joy from all oil and gas players because there is one less heart-attack-inducing paperwork required". He has signed its removal, effective from next week.
At the Istana yesterday, the chairman of Indonesia's Financial Services Authority, Mr Muliaman Hadad, said his agency would relax requirements for frequent visitors who wish to open US-dollar bank accounts up to a first-time deposit of US$50,000 (S$71,000). This would apply to at least 20 per cent of the 10 million to 12 million who visit Indonesia each year, he said, who are identified as frequent visitors, many of whom are on business trips.
Finance Minister Bambang Brodjonegoro also announced a slew of measures, including one that would help ease loans and business terms for small and medium-sized enterprises that pledged not to retrench any workers amid the tough economic climate.
Dr Martin Panggabean of IGIco Advisory said the moves could lead to more jobs, reduce the balance of payments pressure and promote domestic and foreign investment.
Cooperation from the nation's vast bureaucracy, however, remains key. "The government cannot work alone in this... and needs the cooperation and support from all. Let's unite, work together to face the challenges of the global economic slowdown," Mr Joko said.