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Government fails to impress: INDEF

Jakarta Post - October 21, 2016

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Jakarta – Two years under the leadership of President Joko "Jokowi" Widodo, the country is still struggling to make an impact on economic sectors, with development in rural areas and the country's global competitiveness among the government's underperforming areas, a Jakarta-based economic think tank has suggested.

Speaking to reporters on Thursday, Institute for Development of Economics and Finance (INDEF) researcher Bhima Yudhistira Adhinegara said President Jokowi's administration had until now failed to boost economic activities outside Java, which has maintained its position as the country's nexus of development.

"The country's huge dependency on the raw commodity sector has led to stagnancy or even negative economic growth in some regions, including East Kalimantan and Riau provinces," Bhima said during a discussion about the government's economic performance at INDEF headquarters South Jakarta.

Bhima cited Kalimantan, the Indonesian portion of the island of Borneo, as another example. The area, home to five provinces and rich in natural resources, only contributed 7.6 percent toward the gross domestic product (GDP) as of June this year. In 2014, the area contributed 9.1 percent to the GDP.

The GDP is still hugely dependant on Java. According to a report released by the Central Statistics Agency (BPS), the country's most populated island contributed 57.9 percent to the GDP.

Ahmad Heri Firdaus, another INDEF researcher, said dependency on imports had also increased, citing that the country had spent US$447.7 million to import rice during the first half of the year. The country spent last year $351.6 million to import the staple food. "It's ironic because as an agrarian country, we fall behind Vietnam and Argentina," Ahmad said.

Indonesia is ranked 109th by World Bank in terms of ease of doing business, falling behind other countries in the region, such as Malaysia (18), Thailand (9), Vietnam (90) and the Philippines (103).

The Regional Autonomy Watch (KPPOD), another Jakarta-based think tank, previously urged the government to revoke 152 of 410 regional government regulations (Perda) deemed problematic and considered to be impeding the central government's effort to provide an ease of doing business atmosphere.

In Pasuruan regency, East Java, for example, a Perda requires an outsourcing company to deposit Rp 250 million to attain a permit. The regulation contravenes Manpower Ministerial Regulation No. 101/2004 on permit issuance for businesses, KPPOD executive director Robert Endi Jaweng said.

President Jokowi announced in June that he would scrap 3,143 bylaws for contravening higher regulations, or deterring investment. The government has also issued a series of economic policy packages since last year to increase business competitiveness.

The KPPOD, however, has criticized the government's slow pace in issuing a decree to officially revoke the problematic bylaws, as most of the revocations have yet to come into effect, while problematic practices continue in the regions. (fac)

Source: http://www.thejakartapost.com/news/2016/10/21/government-fails-impress-indef.html.