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resident Joko '€œJokowi'€ Widodo unveiled Wednesday a new economic policy package that is aimed at propping up the country'€™s weak economy by eliminating obstacles to investment and stoking consumer spending.

The government will deregulate dozens of rules and streamline a number of licenses in different sectors in the hope of eliminating bottlenecks in investment and government budget disbursement, while also focusing on villages, cooperatives and micro, small and medium enterprises (MSMEs) to stoke growth that has slowed to levels unseen since 2009.

'€œI am certain that this first September round of economic policy packages will strengthen national industry, will grow micro, small and medium enterprises and cooperatives, ease inter-region trade, bolster tourism [and] improve fishermen'€™s welfare,'€ Jokowi said.

Coordinating Economic Minister Darmin Nasution said that the policy package was expected to boost the purchasing power of low- and middle-income people due to their significant role in domestic consumption, which accounts for over half of the country'€™s economy.

The government will provide 14 months of rice for low-income people, as opposed to 12 months previously. It will also accelerate and ease disbursement of village funds through cash-for-work programs to prop up purchasing power.

Villages, which will get a total of Rp 20.8 trillion (US$1.46 billion) from the revised 2015 state budget, will be able to access the funds to work on their own infrastructure projects.

They will no longer be required to develop proposals to access the funds, and instead can choose projects from a list of template options that the government will provide.

'€œWe [also] have an LPG [liquefied petroleum gas] policy for fishermen. We will provide LPG converter kits for them to help reduce fuel costs and we surely expect this to improve their catches and welfare,'€ Darmin said.

The government estimates that fishermen may save on fuel costs by 70 percent by converting from diesel to LPG. Various data available suggests that the amount of traditional fishermen across the archipelago stood at around 860,000 as of 2013, falling significantly from 1.6 million recorded in 2003.

The government is also looking to improve the function of cooperatives. Darmin argued that cooperatives '€” which amount to more than 209,000, according to the latest statistics provided by the Cooperatives, Small and Medium Enterprises Ministry '€” should become a major financing source for MSMEs in rural areas.

'€œThey should become trading houses to support the enterprises in producing consumer goods and products to be exported. To realize this, cooperatives need to upgrade their capital,'€ he said.

MSMEs can also access cheaper bank lending with a 12 percent interest rate, from 22 to 23 percent previously, so that they can expand their businesses without added financial burdens.

According to Darmin, the government is also embarking on efforts to stabilize the price of beef by choosing trading partners that can provide cheaper meat.

'€œWe will expand our trade coverage to include other beef-exporting countries as partners. We hope that it will create more competitive prices and allow the government to stabilize the beef price and supply,'€ he said.

Commenting on the package, Bank Internasional Indonesia (BII) economist Juniman insisted that implementation would play a more crucial role in boosting the economy than the initiatives themselves.

'€œImplementation of many policies has been slow in the past. With four months left before year-end, the government must work swiftly to implement these initiatives,'€ he said.

Separately, I Kadek Dian Sutrisna Artha, director of the Institute of Economic and Social Research (LPEM) at the University of Indonesia, lauded the initiatives, saying that they would be effective in having short-term impact.

He, however, warned that villages might not have the full capacity to absorb the village funds, which could hamper the effectiveness of the cash-for-work program.

Prior to the announcement, Vice President Jusuf Kalla, who largely deals with managing the economy, was rushed to Cipto Mangunkusumo Hospital (RSCM) to undergo cardiac surgery.
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