Jokowi’s reelection buoys economy

Jakarta (The Jakarta Post) -- President Joko “Jokowi” Widodo’s apparent reelection fulfills almost all the basic needs of investors and businesspeople in general: political and macroeconomic stability, legal certainty and policy consistency. The official vote tally will be concluded in a month, but quick counts, which show Jokowi leading the tallies, have proved to be accurate samples in previous elections.

Business matters: President Joko “Jokowi” Widodo stands among a number of businesspeople at Istora Senayan, Jakarta.

The peaceful conclusion of what is seen as the world’s most complex and largest single-day election, also serves as a strong endorsement of Jokowi’s economic management, which over the five years has focused on the development of physical infrastructure and soft infrastructure (institutions), thereby creating a virtuous cycle within the economy. The investment pace will soon be reinvigorated.
Massive physical infrastructure development has improved connectivity between dispersed islands and between rural and urban areas within the major islands, thereby improving domestic market integration and reducing logistics costs. This in turn strengthens economic competitiveness, making the country much more attractive to investors.
Jokowi’s soft infrastructure development through various reforms for institutional capacity building, notably to develop a clean, efficient and competent system of governance and business licensing as well as a better-targeted vocational training system, has further improved the overall business climate. Indonesia’s ranking in the World Bank’s index of the ease of doing business has greatly improved, though more improvement is necessary to put the country on par with its peers in the Asean region.
Yet more encouraging is the fact that Jokowi’s anticipated second term (October 2019 to 2024) holds great promise for Indonesia. Since Jokowi will no longer have to face the five-year political cycle, he will have more political courage to launch bolder, though painful, reforms, which are crucial to sustained development — such as slashing hugely wasteful spending on fuel subsidies, boosting renewable energy development and reducing wide inequality in income distribution and asset ownership.
Jokowi will have a bigger chance of gaining political approval for his bolder structural reforms since, according to the quick counts, his coalition parties also will hold the majority of seats in the House of Representatives.

(Latest Update April 23, 2019)