TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Business upbeat economy will perform better
Business players are optimistic that the economy will fare better in the medium term after unofficial election tallies showed incumbent President Joko “Jokowi” Widodo and his running mate Ma’ruf Amin are poised to win the election
Change Size
B
span>Business players are optimistic that the economy will fare better in the medium term after unofficial election tallies showed incumbent President Joko “Jokowi” Widodo and his running mate Ma’ruf Amin are poised to win the election.
The business community and economic observers hope President Jokowi will keep his promise to prioritize key structural reforms so that the economy will perform better than in his first term.
“Priorities for reform should target improving human-resource capabilities to increase Indonesians’ skills and make them better suited to the challenges faced by business in the modern economy,” executive director for the British Chamber of Commerce in Indonesia (Britcham) Chris Wren said on Wednesday.
According to Wren, the structural reforms could include taxation and incentives for investors in certain sectors such as manufacturing and export-oriented businesses, better coordination across ministries in the formulation or removal of regulations and a further liberalization of the “negative list” with an approach similar to that taken by Vietnam.
Indonesian Shopping Center Tenants Association (Hippindo) chairman Budihardjo Iduansjah echoed the hope that the incoming government’s policies and reforms should be made in a consolidated way so as to avoid policy flip-flops or uncertainties.
Meanwhile, Indonesian Employers Association (APINDO) chairman Hariyadi Sukamdani said the business sector was pleased by the peaceful polls on Wednesday. He said the private sector fully supported Jokowi’s pledge to improve Indonesia’s competitiveness through human capital development, while adding that opening up the labor market to accommodate workers was also essential.
Hariyadi said APINDO would push for reform of Law No. 13/2003 on manpower as the 15-year-old law was outdated and needed to be amended to accommodate recent developments in industry, including anticipating the fourth industrial revolution — colloquially known as Industry 4.0.
Indonesian Chamber of Commerce and Industry (KADIN) deputy chairwoman for international relations Shinta Kamdani said business players expected the government to create a conducive investment climate as well as build a more resilient economy for the country.
The head of the department of economics at the Centre for Strategic and International Studies (CSIS), Yose Rizal Damuri, said he hoped the government would pick up the pace of structural reforms as Jokowi had already rolled out 16 economic reform packages during his first presidential term.
He also said that stakeholders would closely monitor the formation of the economic team in any new Cabinet, saying that it would be one of the indicators that demonstrated the seriousness of the President in pushing through policies deemed unpopular but necessary for the economy.
Center of Reform on Economics (CORE) Indonesia research director Piter Abdullah told The Jakarta Post on Wednesday that the quick count result was in line with market expectations because many domestic and international pollsters’ surveys had shown that the incumbent would be reelected and continue in office for another five years, he said.
“Market players, particularly foreign investors, predicted Jokowi’s lead, so there should be no shock to the exchange rate,” he said, adding that the rupiah would remain stable in the days after the elections.
Monex Investindo Futures analyst Dini Nurhadi Yasyi agreed, saying market players were more concerned about the global financial market rather than about who would win the election and the country’s macroeconomic condition.
Given those circumstances, she predicted the rupiah would continue to trade against the greenback in the range of 14,015 to 14,120 per US dollar, as it did on Tuesday when it strengthened by 0.16 percent to 14,085 per dollar on the spot market
On the stock market, meanwhile, analysts have predicted the Jakarta Composite Index (JCI) will continue its upward trend on Thursday as investors react positively to the smooth and safe elections.
Investa Saran Mandiri analyst Hans Kwee told the Post that he expected the JCI to strengthen in the range of 6,450 to 6,581 on Thursday as investors were reassured after seeing the elections run so smoothly.
