Indonesia’s new president elect, Joko Widodo, aims at boosting Indonesia yearly economic growth to 7% by the year 2018. In this Bloomberg video, Alia Karenina reports on the several economic policies that will be put in place in order to stimulate exports, investments and infrastructures development.
Joko Widodo’s main economic measures to reach the 7% growth target
Measures for Indonesia’s export
- Boost exporting industries by attracting more investments in manufacturing and non commodity-based industries, as commodities such as palm oil and tin are very important parts of Indonesia’s exports, but very prone to commodity markets’ volatility.
- In order to diversify exports, Joko Widodo is commited to cut political red tape and creating tax incentives for foreign businesses.
Measures for Indonesia’s infrastructures
- Targeting more foreign investment for infrastructure development.
- Developing a “sea toll road” to allow goods to be transported even to the most remote places in Indonesia. This project will cost about 70 Trillion Indonesian Rupiah (5.8 Billion USD) and could cut freight cost up to 50%.
- Indonesia’s logistics association think this project is not feasible though, as funding are not sufficient for large ships and deep sea ports.
- Thus, Jokowi might merge certain state-owned enterprises and sell bonds to fund this ambitious project.
Alia Karenina reporting to Bloomberg’s Rishaad Salamt on September 2014