Indonesia unveils stimulus to bolster economy, currency

JAKARTA – Indonesian President Joko Widodo on Wednesday unveiled a series of stimulus measures to lift slowing growth in Southeast Asia’s top economy and shore up the country’s plunging currency.

President Joko Widodo unveils a series of stimulus measures at the presidential palace in Jakarta on Sept 9, 2015.

In a televised address, Widodo was joined by key policymakers to announce a broad range of measures including the slashing of red tape to woo investors, moves to bolster the rupiah, and programmes to help the poor.

The president said the stimulus was aimed at providing an “economic jump forward”, and that two other parts of the package would be unveiled in the coming weeks.

Widodo came to power last year pledging to boost the G20 economy but his government has faced criticism for a series of policy flip-flops, sending mixed messages to investors and a failure to get key initiatives off the ground.

In a bid to cut through red tape, the president said Wednesday that adjustments were being made to 89 regulations to simplify doing business and cut “irrelevant regulations which have hampered the competitiveness of national industry”.

Policies announced to help the poor included the provision of cheaper fuel to fishermen, more funding to villages and the strengthening of a programme to provide cheap rice.

Agus Martowardojo, governor of the central bank, Bank Indonesia, announced measures to help the rupiah, including improving the management of foreign exchange flows.

Other steps unveiled in the package included helping exporters with financing and making it easier for frequent foreign visitors to Indonesia to open bank accounts.

Widodo had pledged to kickstart growth by creating new jobs for the young, starting a flurry of infrastructure projects and boosting the manufacturing sector.

But growth has continued to slide, hitting a six-year low of 4.7% in the second quarter, while the rupiah has fallen to a 17-year low in recent months. On Wednesday, the unit was changing hands at 14,250 to the dollar.

Like other emerging markets, Indonesia has also been hit by external factors, such as expectations that the US will soon raise interest rates and China’s devaluation of its currency.

Widodo had already taken some steps to boost confidence in his economic management. Earlier this month, he announced tax breaks for some industries and in August he replaced key economic ministers in a cabinet reshuffle.

TOM’S COMMENTS:  Look for similar programs surging through ASEAN and specifically GMS corridor countries.  Programs will include populist programs to boost spend and initiatives to hand currency fluctuations.  Benchmark goals and forecasts will be rarely provided with the announcements of initiatives.

Source:  Bangkok Post | September 10, 2015

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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