Jakarta, Sept 22 (Antara) - After announcing the first phase of the economic policy package on September 9, the government is planning to unveil the second phase of the same package at the end of this month.
"We will complete the process in the second half of September as the president will return from his visit to the Middle East on Sept. 15," Chief Economic Minister Darmin Nasution stated.
The minister made the statement at Halim Perdanakusumah Airport on Friday (Sept. 11) after bidding farewell to President Joko Widodo (Jokowi) who departed on a four-day visit to several Middle Eastern countries.
Nasution stated the government would soon issue a second phase of the policy package comprising four groups of regulations to overcome various economic problems.
"There will be four groups (of regulations) in the second phase of the policy package," Nasution said.
On September 9, President Jokowi announced the first phase of the economic policy package which comprised:
Firstly, the government would encourage the nation's industrial competitiveness through investment deregulation as well as enhancing law enforcement and business certainty.
Secondly, the government would accelerate national strategic projects by removing obstacles encountered to ensure their smooth implementation and completion.
Thirdly, the government planned to increase investment opportunities in the property sector.
"There are 89 regulations that have been revised as part of the efforts to strengthen coherence, to prune irrelevant regulations, and to increase the competitiveness of the national industry," the president stated while announcing the package.
In total, 134 regulations issued by 17 ministries/state agencies will be deregulated. These include 17 government regulations, 11 presidential regulations, two presidential instructions, 96 ministerial regulations, and eight other regulations.
President Jokowi also expressed his commitment to completely deregulate all economic packages in September and October 2015.
"So, a first, second, and third package will be announced," the president said.
According to Nasution, the second phase of the economic policy package will be announced at the end of September and will comprise four groups of regulations.
He explained that the four groups would focus on fiscal and financial matters; deregulation on investments in the industrial and trade sectors; incentives for accelerating the development of smelters; and the handling of food problems.
Nasution acknowledged that the policy package on fiscal and financial matters would constitute six to seven points that would regulate foreign ownership in the property sector and regulate debt-to-equity ratio, among other things.
"It will include regulations on the construction of houses or apartments by foreigners and regulations on the debt-to-equity ratio for foreign borrowings. If the capital is small, one should not borrow too much money as it could create problems for all of us," Nasution noted.
There will also be regulations on the utilization of funds for village development, so that greater focus is laid on the development of irrigation projects, bridges, and roads, among others, he asserted.
For realizing the policy packages, Minister/State Secretary Pratikno has established the office of the Coordinating Ministry of Economic Affairs as a command post to accelerate the successful implementation of the economic policy package.
"The implementation of the economic policy package will come under the control of the coordinating minister for economy to speed up deregulation," Pratikno stated here on Thursday (Sept. 17).
Economist David Sumual of publically listed PT Bank Central Asia stated that the second phase of the economic policy package to be announced by the government should include three outlined goals comprising the acceleration of budget expenditure, extension of direct funds to the public, and reduction of dividend repatriation through incentives.
"The main objective is to assist the people in increasing their purchasing power. It can be in the form of a cash-for-work program for accelerating economic activities in villages. However, it should not follow the previous program of direct cash assistance, which was provided without clear targets," Sumual stated during a discussion on Wednesday night (September 16).
Sumual is of the view that direct funds for labor-intensive programs in villages can restore the people's purchasing power, which is deemed important as the consumption sector is still one of the main economic drivers in Indonesia.
However, the extension of compensation funds should be based on a clear mechanism and strong supervision to achieve the set targets.
"The use and target of the funds should be clearly identified such as the construction of bridges, educational facilities, and mosques, among others," he remarked.
Sumual explained that the second target of the economic package is to accelerate the absorption of central and regional government budgets. For this purpose, the government should soon issue a presidential regulation on the acceleration of budget disbursement.
In the meantime, economist Destry Damayanti of Mandiri Securitas has expressed hope that the government would not issue too many economic policy packages in light of the global crisis.
"The government should not issue more than three policy packages. Two packages are adequate to avoid creating further uncertainty," Damayanti said at a press conference on Monday (Sept. 21).
She pointed out that if the government issues too many packages, it would lead to uncertainties and would create panic among investors.
"They could panic because uncertainties create worries. They would have difficulty in making market predictions," noted Damayanti.
Besides creating economic packages, the government also needs to create a balance between the economy and the regulations issued by Bank Indonesia (the central bank), she emphasized.
However, the government's steps to issue the economic policy packages will not yield instant results. According to Vice President Jusuf Kalla, the newly issued economic policy package will not improve the nation's economy instantly, and the country will have to go through several phases to achieve the desired results.
"Admittedly, it (the economic policy package) will not instantly make it (the economy) better," Kalla stated at the Vice Presidential Office last week. ***3***
(T.A014/INE)EDITED BY INE (T.A014/A/BESSR/F. Assegaf) 22-09-2015 14:02:2 |
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