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Economic policy packages ineffective so far, says economist
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The Institute for Development of Economics and Finance (Indef) executive director Enny Sri Hartati has criticized the lack of coordination behind the implementation of the 12 economic policy packages, which she says has led to a slow impact on business competitiveness, investments growth and job creation. (Antara/Reno Esnir)
T
he 12 economic policy packages launched by the government recently are yet to effectively increase business competitiveness, investments and job creation, an economist has said. As usual, the devil is in the implementation.
Institute for Development of Economics and Finance (Indef) executive director Enny Sri Hartati said there had been no significant changes in investment performance compared to previous years when there were no economic stimulus packages.
Indonesia's economy only grew 4.92 percent in the first quarter of 2016, lower than the previous quarter's growth of 5.04 percent.
"Investments have increased but the economy grew at a slower pace and unemployment also increased. These problems must be addressed in the next policy packages," Enny said in a discussion on the evaluation of the 12 policy packages held in Jakarta on Monday.
The poor implementation, according to her, was due to overlapping regulations and a lack of coordination between technical ministries as well as between the central government and local administrations.
Enny further said the idea behind the 12 economic policy packages was to increase Indonesia's competitiveness and its people's purchasing power, but unfortunately, the government had only addressed the normative regulations.
"The government should map strategic industries to address the fundamental problems," she explained, adding that the next policy packages should no longer contain normative rules, but instead only concrete implementable programs.
Indonesian Employers Association (Apindo) chairman Anton J. Supit added that to make economic policy packages more effective, the government should focus on labor-intensive industries to resolve unemployment.
"The government has set industry as the backbone of the economy. All regulations should focus on this sector, hence, all regulations that constrain labor-intensive industries should be eliminated," he said.
He also said that what businesspeople really needed was not merely deregulation, but consistency from the government. "The thing most complained about by investors is our consistency," he continued.
Coordinating Economic Deputy Minister for Industry and Trade Edy Putra Irawady said 197 of 203 regulations in the policy packages had been completed. The government is currently in the process of completing the remaining regulations, as well as the 26 supporting regulations.
He claimed the policy packages had already produced several notable impacts since September last year, such as an improvement in the ease of doing business and a more flexible investment negative list (DNI). (ags)
