In light of Joko Widodo’s (Jokowi) presidential win on 22 July 2014, economists have expressed that Indonesia’s new administration will take a pragmatic, pro-business approach towards the economy. This is according to a Channel NewsAsia report titled “New opportunities in Indonesia expected for Singapore firms” (22/07/2014).
SingaporeCompanyIncorporation.sg is also optimistic that the new Indonesian administration will open up opportunities for Singapore incorporated companies as it aims to make good on its promise to eradicate poverty, propel the country’s development as well as make economic reforms desired by investors.
According to a Jakarta Post report, No slacking off, Jokowi dashes on (24/07/2014), President-elect Jokowi aims to spur Indonesia’s economic growth to at least 7% during his tenure, in line with the MP3E1 Master Plan goals. His plans include boosting tax revenue collection, making sustainable fuel subsidy reforms and allocating funds to growth-generating projects such as infrastructure. He also plans to cooperate with incumbent President Susilo Bambang Yudhoyono’s 2015 budget.
MEETING INDONESIA’S DEVELOPMENT NEEDS
Last year in April, during the Singapore-Indonesia Leaders’ Retreat, PM Lee Hsien Loong and incumbent President Yudhoyono agreed to enhance private sector partnerships under the 2025 Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI). The Master Plan, established in 2011, aims to model Indonesia into a developed country by 2025.
To accelerate and expand its economic development, the MP3E1 seeks investments in 8 main programs including food agriculture, mining, energy, industrial, marine, tourism, telecommunication, and strategic areas Jabodetabek and Sunda Straits. It also seeks to develop six economic corridors through improved road, water, power, sea and airport infrastructure – areas Singapore is well placed to lend its expertise to.
Commenting on the news, Ms. Cheryl Lee, Operations Manager of SingaporeCompanyIncorporation.sg said, “Indonesia’s development plans under the new administration spell good news for Singapore companies. The areas in which they wish to develop are areas in which Singapore companies can contribute to. According to IE Singapore, Singapore companies can fill the demand for expertise in clean water supply, power generation, waste management, as well as ports and urban transportation in Indonesia. In addition, as Southeast Asia’s largest economy, Indonesia has a 238-million population and rapidly growing middle class that will create opportunities for Singapore firms in the consumer sector, particularly food and beverage.”
IE Singapore also said that Indonesia was Singapore’s fourth-largest trading partner in 2013, with total trade amounting to S$74.8 billion. In addition, in its Asian Development Outlook 2014, published in April, the Asian Development Bank (ADB) anticipated that Indonesia will grow 5.7% this year and 6% in 2015.