How are Jokowi’s Economic Packages Progressing?
Indonesian economy is now slowing down and getting weaker. This is indicated by the decrease of Rupiah value against US Dollar, major job cuts, fluctuation in commodity market, foreign debt, the imbalance between import and export, inflation, and some other factors. Responding to these, Indonesian President Joko Widodo has already launched some economic regulation packages that are hoped to be the way out for current economic hardship.
There have been 6 economic policy packages including provision of incentives and easiness for all economic activities, deregulations for investors, interest subsidy for Small and Medium Enterprise’s credit, and cheap housing for worker society. Next, the government also manage to encourage investment by simplifying the process to get permit, accelerating the implementation of tax allowance and tax holiday, waiving VAT for certain transportation related imports, lowering the interest rate of exporters’ deposit, giving incentives and additional capital to companies to lower they production cost, recalculating the minimum wages and working capital credit for export goods producers, giving incentive for asset revaluation and eliminating double tax in Real Estate Investment Trust (REIT), also providing incentives for industrialization process of Special Economic Zone (KEK).
Looking at the benefits and the impact, these policy packages show an improvement in the Indonesian economy. One successful policy is the acceleration of the national strategic projects. After Jokowi was inaugurated as Indonesian President, he soon started developmental project, some are a mega projects such as fast train project from Jakarta to Bandung and Trans Sulawesi train project. These indeed display the seriousness of his administration and the willingness to bring back the Indonesian economy to a better status. Even though the packages have not shown any significant results, they are indeed promising. They just take time to be able to give benefits and advantages for the whole society.
However, there are still some loopholes. The policy to improve people’s purchasing power seems not running well, in fact it stops. This was signaled by the job cuts and the report saying that many domestic and foreign companies were suffering a big loss due to low purchasing power of the people. A paragon example is the exit of Ford, an automotive company from US, from Indonesian market resulting major job cuts.
*) I Nurdin, graduate student in STIMA IMMI, Jakarta)