T

he artillery of three reform packages, combined with Bank Indonesia'€™s intervention in the forward market and the unexpectedly weak non-farm job growth in the US in September, has strengthened Indonesia'€™s rupiah against the US dollar since early this month. The lower-than-expected US job growth has pushed down the dollar against most major currencies in Asia, including the rupiah, which appreciated by 6 percent as of early this week.

The government on Wednesday launched the third reform package in the past 30 days, which will reduce energy costs for businesses, expand the subsidized microloan program, expedite land procurement and further cut investment-licensing red tape.

These measures follow up on the first and second packages of regulatory and bureaucratic reforms launched on Sept. 9 and 29 with the objectives of boosting the purchasing power of lower-income people, increasing the supply of dollars at local banks and abolishing hundreds of regulations deemed inimical to economic activities.

In the second round, the government pledged to cut down licensing for the use and lease of forested land, from four to six years to a maximum of 15 days. The latest package includes measures to expedite the process of granting land titles: from 30-90 days to 20 working days for the approval of land titles for businesses (HGU) with a maximum acreage of up to 200 hectares; and to 45 working days for a commercial operation with over 200 ha. The approval process for land titles to build (HGB) will also be halved to about 20 days.

The third round of the reform artillery will further strengthen the market perception that the government really has a sense of urgency and crisis that requires firm and quick measures. The pronouncement on Wednesday that a fourth reform package was also in the pipeline will further prove the government'€™s policy consistency and predictability and this will hopefully help regain market confidence in the government'€™s economic management.

One of the upcoming policy measures is the launch within the next few weeks of a long-prepared farm insurance program for rice crops. The government will subsidize 80 percent of the insurance premiums for millions of farmers.

However, experience shows that announcing reform packages is one thing, but fully enforcing them is quite another. Since rents have built up within the arduous licensing mechanisms and excessive regulations, there would likely be strong opposition to these reforms.

But we are comforted to learn that a regulatory reform center has been set up at the Office of the Coordinating Economic Minister to monitor and supervise the implementation of the regulatory and bureaucratic reforms.

The center will operate as an economic nerve center where all decisions will be made and follow-up measures taken to ensure that the series of reforms needed for reinvigorating business and investment are fully enforced. Hopefully President Joko '€œJokowi'€ Widodo will give a strong mandate to this center to better manage interministerial cooperation and coordination.