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World Bank urges new govts to provide policy certainty
The sooner new administration send their policy directions to households and companies, the better.
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People line up to buy basic daily necessities at a cheap market event held by the government in Surabaya, East Java, to maintain stable food supplies and prices on March 12, 2024. (AFP/Juni Kriswanto)
T
he World Bank urges countries, including Indonesia, to improve policy clarity for businesses as a sustainable way to push economic growth, citing the limited fiscal and monetary room that many countries were facing amid prolonged global uncertainty.
World Bank East Asia and Pacific vice president Manuela Ferro said solving policy uncertainty was critical given that this year many countries would see a change in leadership. The sooner new administrations send their policy directions to households and companies, the better, she said.
“At the end of the day, we are at a time when there's only so much fiscal or monetary stimulus [we can do to] carry growth in these economies over the long run,” Ferro said during an online event on Thursday.
“This is a time when businesses would like clarity about the investment regime that they will be operating under. So this is very critical,” she added, pointing out that competition-enhancing policies would help attract more investors into economic activity.
More than half of the world's population will cast their ballot this year. The Asian region has seen nine elections, including Indonesia in February.
On March 20, Indonesia’s General Elections Commission (KPU) announced Defense Minister Prabowo Subianto as the winner of the polls, slated to be sworn in this October, alongside his running mate Gibran Rakabuming Raka, incumbent President Joko “Jokowi” Widodo’s eldest son.
The International Monetary Fund (IMF) warned in a report in October last year that countries needed to mitigate heightening fiscal risks, such as tight financing conditions and mounting concerns for debt vulnerabilities.
