Widodo demands monetarist reforms

Indonesia President Joko Widodo wants more economic liberalisation. Source: Wikimedia

Indonesia will further open its markets and lift obstacles for foreign investors, President Joko Widodo told an Asean Economic Community conference in San Francisco. He said recent deregulation packages had not gone far enough to encourage foreign investment.

“I’m not satisfied; please understand we are still only at the beginning. We will continue to simplify, continue to open up, continue to modernise our rules and regulations. There are still many excessive permits, licences and protections,” he told delegates.

Widodo gave the keynote address at the conference after attending the US-Asean leaders’ summit in Sunnylands, California, earlier in the week. Jakarta last week announced its 10th economic stimulus package where 35 industrial sectors were removed from the negative investment list.

Cold storage, sports centres, tourism and other sectors would now be allowed to have 100-per-cent foreign ownership. He said he was following the monetarist polices of former US President Ronald Reagan and ex-British Prime Minister Margaret Thatcher.

“Together they deregulated the American and British economies, they freed businesses and industries from excessive rules and regulations,” said Widodo. “Today we must do the same in the emerging markets.”

Chairman for the US-Asean Business Council Keith Williams said firms that were looking to invest overseas considered many factors, one of which was the friendliness of the regulatory system.

“Any country can make efforts to make their legal system transparent and reliable. To make their financial system transparent and reliable; to make their regulatory system appropriate, it will really foster foreign investment,” he said.

Widodo later travelled to Silicon Valley to visit Facebook, Google and Plug and Play and other tech giants.

During the Sunnylands conference he encouraged Asean and its US hosts to play greater roles in resolving the Palestinian conflict.

During a working dinner, Widodo said two major issues that should be considered by the US and Asean were peace in the South China Sea and Western Asia.

The president said Indonesia firmly supported the independence of Palestine.

“I encourage Asean and the US to continue to contribute to resolving the Palestinian issues,” Widodo said in a statement.

The Palestinian conflict would be among issues addressed at the Organisation of Islamic Cooperation (OIC) summit in Jakarta next month, he added.

Counter-terrorism policies needed greater effort, he said, with the number of extremists rising. With regards to the South China Sea, the president called on all parties to stop activities that could increase tensions, adding that international laws must be respected. As a country with no claim to the contentious waters, Indonesia wanted to help build peace and stability in the South China Sea, he said.

Observers are waiting for Indonesia, as Asean’s largest economy, to take a lead to reduce tensions in the sea.