Indonesia to streamline bureaucracy, may restructure Cabinet posts

Indonesian President Joko Widodo is looking to ease bureaucracy and may also restructure leadership posts as Indonesia is falling behind others in the region in terms of foreign investments and exports.
Indonesian President Joko Widodo is looking to ease bureaucracy and may also restructure leadership posts as Indonesia is falling behind others in the region in terms of foreign investments and exports.PHOTO: AP

JAKARTA - President Joko Widodo is going to ease bureaucracy and may also restructure Cabinet posts as Indonesia is falling behind others in the region in terms of foreign investments and exports.

Mr Joko is mulling over creating a ministerial post that focuses entirely on investment, merging the trade and industry ministries to streamline bureaucracy. He has also been advised to appoint a foreign affairs minister who has strong expertise on trade.

A palace insider told The Straits Times that among the people considered qualified to be the next foreign affairs minister is seasoned diplomat Mahendra Siregar, who had held the positions of deputy trade minister and deputy finance minister. He is currently Indonesia's ambassador to the United States.

During a meeting last week with his ministers, Mr Joko raised his observation on manufacturing plants moving out of China to circumvent tariffs imposed by the US on Chinese goods in their trade war.

None of these companies was going to Indonesia, he said.

Instead they chose countries such as Vietnam, Malaysia and Thailand as these places have less bureaucracy and more welcoming regulations, he noted.

Citing a research report, Mr Joko said between June and August 2019, 33 Chinese companies announced plans to set up or expand facilities abroad - 23 of them are going to Vietnam and the rest to Malaysia, Thailand, India, Cambodia, Mexico and Serbia.

He highlighted that setting up a factory in Vietnam would take about two months, while in Indonesia it could take more than a year.

"I asked all ministers... to identify hindering regulations," he said, stressing that his administration will then streamline the regulations.

 

He added that Indonesia must quickly preempt a possibility of the global economic weakness getting worse.

The President met his ministers again on Wednesday (Sept 11) to discuss the issue.

Indonesia has been trying to tackle a widening current account deficit amid a global economic slowdown. It reached US$31.1 billion (S$43.2 billion) last year. South-east Asia's largest economy imports more goods and services than it exports.

But it has been an uphill task, as the country is facing deindustrialisation - output growth from the manufacturing sector has for years been consistently below the overall output that the economy produces.

With boosting investment and exports at the top of his agenda, Mr Joko has hinted that he would merge ministries and create new ones. "I have asked (my) ministers whether we need an investment minister, an export minister," he told reporters.

Mr Sofjan Wanandi, chairman of Vice-President Jusuf Kalla's economic team, told The Straits Times that the government will cut headcounts of civil servants tasked with administrative work to create slimmer organisations.

The objective of restructuring the Cabinet posts is to make the Cabinet more effective, with possibilities of merging a few ministries, Mr Sofjan said, pointing out that this is, however, not final.

He added: "It is not yet certain whether we are really going to have a foreign minister deal with our international trade... This is just an idea being discussed."