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Businesses doubt coordinating ministers’ veto rights
The government is struggling to improve the country’s business climate by carrying out deregulation efforts, among other things, in a bid to attract more foreign direct investment.
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Coordinating Political, Legal Affairs and Security Minister Mahfud MD gestures during the Indonesia onward cabinet annoucement by President Joko “Jokowi” Widodo on Wednesday, October 23, 2019. (JP/Seto Wardhana)
P
resident Joko “Jokowi” Widodo’s decision to give veto rights to coordinating ministers in his Indonesia Onward Cabinet has raised doubts among businesspeople, despite a glimpse of hope that the move would help smooth out investment-friendly policy making.
In a move to streamline policy making, Jokowi has given a nod to respective coordinating ministers to veto the decisions and policies they deemed as contradicting the government’s overarching goal of luring investment and opening up more jobs.
Indonesian Chamber of Commerce and Industry (Kadin) deputy chairwoman Shinta W. Kamdani was less than enthusiastic when she learned the news, saying that despite Jokowi’s decision to synchronize policy making in the central government, such a move would not guarantee that the policies rolled out by the ministers would be in line with the needs of the private sector.
“Even the Online Single Submission, which is one of the good [policies] of the Office of the Coordinating Economic Minister, was launched too soon so that it caused negative effects on Indonesia’s business climate,” said Shinta.
“The veto power of the coordinating ministers will not be enough to solve these kinds of problems but instead, [the proposed policies] need to be consulted over intensively with businesspeople and investors to ensure they are in line with the needs of the private sector.”
The government is struggling to improve the country’s business climate by carrying out deregulation efforts, among other things, in a bid to attract more foreign direct investment. Investments, which contributed more than 30 percent of Indonesia’s gross domestic product (GDP) in the second quarter, only expanded by 5.01 percent during the period, less than the 5.05 percent of overall economic growth.
The Jokowi administration is also planning to formulate omnibus bills to revise dozens of overlapping regulations that hinder investment.
