Indonesia’s new President, Joko Widodo, is working on aggressive economic reforms designed to lure the large-scale foreign investment Indonesia needs to develop apace with other Asian countries. The Wall Street Journal reports:
Last month, Mr. Widodo earned applause from economists by pushing through a controversial rise in the price of subsidized fuel prices, freeing up billions of dollars for infrastructure projects. His next step, he said, beginning this month, will be to shake up the state-owned electric company that has a monopoly on electricity distribution across the archipelago nation. A senior adviser said this would include a partial or total replacement of the company’s board.Mr. Widodo said a one-stop national office to speed up processing business permits would be opened in January to shorten the time from as long as a year to a few weeks—a personal priority for him as a former businessman who struggled to start a successful furniture-exporting company. […]He has asked ministers to study offering tax holidays and other incentives to attract new investment. In “competitive’’ situations where he might be vying with neighbors for billion-dollar investments, he said he would be ready to make a deal.
Additionally, Jokowi (as he’s known) is working to establish a coast guard that can protect the integrity of Indonesia’s maritime territory, and he is already taking a firm stand against illegal fishing by ordering the sinking of foreign vessels found in Indonesian waters.Taken together, these reforms are huge news: Indonesia has the potential to join the ranks of Asian “tiger” economies, and its new President appears determined to make the necessary changes. As the world’s most populous primarily Muslim nation, and its third-largest democracy (only India and the U.S. are larger), Indonesia is potentially a heavy hitter. Promoting economic development in Indonesia is very much a goal of America’s Asian strategy, and these changes look to be very good news.