Sofjan Wanandi. JP/Wendra Ajistyatama

As Indonesia braces for the 2014 election in April, businesspeople have high hopes that the new government will pass sound economic policies and improve the overall business climate. The Jakarta Post's Linda Yulisman and Imanuddin Razak recently spoke with Indonesian Employers Association (Apindo) chairman Sofjan Wanandi about the business community's expectations.

Question: What do businesspeople expect from the 2014 elections?

Answer: This will be the most important election we have ever had. After the experience of the past five years, businesspeople are becoming more serious about choosing who will lead us in the future. Currently, we cannot determine who would be the best because the definitive list of presidential candidates will only be revealed after the legislative election.

We want change and demand a strong government. We need a down-to-earth leader who will actively engage in executing sound economic programs to cope with challenges such as globalization, domestic problems, the trade deficit and unemployment. Without a strong government, the situation will become more difficult because the democracy since 1998 has created legal uncertainty, which bothers all of us. Democracy does not work without legal certainty. Businesses struggle with conflicting and overlapping regulations issued by the central government and regional administrations, resulting in grey areas. Such a situation is often used by the bureaucracy against us.

Over the past five years, government programs have not run as well as expected, especially the development of infrastructure, which is our key bottleneck. If we want to progress, the next government should ensure legal certainty, improve the economy at the regional level and ensure the areas that we consider crucial ' agriculture, energy, manufacturing ' are given priority.

We have seen rising unemployment and a widening gap between the rich and poor. There are 30 million people who now live on less than US$1 each day, while 100 million live on less than $2 per day. There are at least 3 million people seeking employment each year, but we can only create between 1.2 million and 1.5 million jobs annually. The rest work in the informal sector, become migrant workers or become criminals. Ultimately, businesspeople will also be affected if we do not help the government overcome these problems and make some changes.

We cannot hand our destiny to politicians who only care about power and money rather than the people. Democracy should serve the interests of the people and not the interests of certain groups. This situation cannot go on anymore and it can only be changed through new leadership. This is what we are waiting for: We will support the best candidate. That is our position.

So it means that the leader should be pro-people?

Yes. The policies should also be pro-people and that means the president must be involved in economic development. It must be given priority, while unemployment and poverty must also be key targets to be addressed.

What political party is close to the above-mentioned criteria?

Maybe the Golkar Party or the Indonesian Democratic Party of Struggle [PDI-P]. The PDI-P, for example, has a bigger chance [this election] because of the current government's failure. But in my view, no party should be complacent. Every party must work hard in order to win the election.

In terms of economic policies, what should the new government prioritize?

We are collecting suggestions from the perspective of businesspeople for the new government. There are at least five issues that it should address quickly. First, legal uncertainty, which currently means investors are reluctant to invest. Second, regional autonomy. Third, infrastructure. Fourth, de-bureaucratization. Fifth, poverty and unemployment.

We also target five sectors to work on: agriculture, energy, manufacturing, monetary and fiscal and services. To meet the priorities and targets, we would prefer technocrats rather than politicians in the Cabinet.

Currently, we rely heavily on food imports. How will the upcoming government cope with this?

We can be self-sufficient in food production, but only with clear planning. The most important thing is to focus on certain food commodities. For instance, as we can be self-sufficient in rice, corn and sugar, these should be our focus. We do not need to concentrate on others, such as soybean.

I think there should be a major change to agriculture policies. We should intensify counseling, development of irrigation infrastructure and others. We must save the agriculture sector because it absorbs the biggest amount of our workforce. Around 40 percent of our population work in the sector and most are the country's poorest people.

What about the energy sector?

There is no other way than to reform all the energy policies. We must combine oil with coal, gas, bio-diesel and water to get the cheapest energy sources in order to compete in electricity pricing [with other countries]. We have all the resources but they are poorly managed.

We need investment and must think of ways to attract investors. The private sector is actually enthusiastic about investing in the energy sector, but due to our current policies they are unwilling to. They, among others, struggle with complicated land-acquisition and permission issues.

The same rule will apply to our manufacturing industry. Appropriate incentives and disincentives are necessary to spur growth in the upstream sector, which will allow us to build a complete chain domestically from the upstream to downstream industry. Supported by good infrastructure and tax incentives, industrialization will then work, enabling us to compete better.

The fuel subsidy has always been a crucial issue for the government. What policy is necessary to overcome this problem?

It must be removed gradually with the biggest subsidy cut taking place in the initial years. With the current level of subsidy, the government does not have sufficient fiscal space to address other major issues. Furthermore, the subsidy usually goes to improper targets.

In terms of automobile manufacturing, there are two conflicting issues. On one hand, the government aims to reduce traffic jams, but on the other hand, it also wants to support manufacturing industry and move the economy.

The key solution lies in rapid infrastructure development and clear policies. It is important that the government should be consistent with its policies. The state budget has mostly been allocated to education, health, operational costs for regional administrations, subsidies and debt payment. There is not enough spending on infrastructure, so we need private investment.

Government policies are rife with changes and inconsistencies that affect infrastructure development. That explains why there has been no investment in infrastructure for more than six years. Investors are commonly cautious about such changes. Most infrastructure development projects last for 10-15 years, thereby, consistent policies are necessary.

There should also be clear priorities about what kind of infrastructure is essential and where: for example trains in Java or ports in Kalimantan. This cannot be left to regional administrations.

Does it mean reforms in the regional administration level?

The Regional Autonomy Law should be revised. Regional autonomy is still necessary, but should be regulated. There should be rules of the game: who holds the power; what is the role of the governor, regent or whomever. There must be clear lines of command and regulation implementation.

Regional expansions should be stopped and the focus should be on consolidations within existing regions.

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