Satria Sambijantoro
and Raras Cahyafitri, The Jakarta Post, Jakarta | Headlines | Wed, April 08
2015, 5:19 AM
President Joko “Jokowi”
Widodo made a surprise visit to the Indonesia Stock Exchange (IDX) on Tuesday
to shore up market confidence amid growing concern over inconsistencies in
government policies.
The President was greeted with a surge in share prices that propped up the Jakarta Composite Index (JCI) by 0.7 percent to close at 5,523, the highest level in the local stock market’s history. Jokowi expressed optimism that the JCI could soar to 6,000 before the end of the year, because of sustained foreign fund inflows. “This reflects a vote of confidence among investors in our country, as people still have faith in the outlook of the Indonesian economy,” the President told reporters.
The State Palace’s protocol staff said Jokowi also intended to visit Kwitang — a subdistrict in Central Jakarta known as the city’s foreign exchange trading center — to talk with local dollar dealers about developments in the currency market. However, he canceled the plan without giving a detailed reason.
The rupiah also strengthened to below Rp 13,000 per US dollar , according to the Jakarta Interbank Spot Dollar Rate (JISDOR). Having weakened to the 13,100-level this month, the currency stabilized recently as concerns over the US interest rate hike subsided.
“As soon as the state budget is disbursed, our economy will liftoff, with an improved investment climate boosting the confidence [of investors] that can strengthen the rupiah,” Jokowi said.
Jokowi’s visit came amid growing criticism of the government’s implementation of a number of its policies, such as the government’s decision to annul a plan to impose taxes on toll roads, as well as a plan to require banks to report tax cuts on time deposits.
The policies have been cancelled despite the country’s desperate need for money to finance its infrastructure-spending program.
Indonesia might face a potential revenue shortfall of Rp 282 trillion according to the World Bank, which predicted a possible swelling of the fiscal deficit due to Jokowi’s overly ambitious tax collection target.
Other than the tax policies, the President also backtracked on implementing a new visa-free policy to attract tourists, a new regulation increasing car-purchase allowances for lawmakers and on the censorship of extremist websites, after the policies attracted significant media coverage.
Prior to his IDX visit, Jokowi visited state-owned electricity firm PLN on Tuesday to encourage the company to continue to be optimistic regarding the completion of a large power procurement program of 35,000 megawatts (MW) in five years. Observers fear it is unrealistic.
“This is not an easy target. Previously, we failed to realize the development of 10,000 MW in eight years. I have said to [PLN] management, general managers and heads of divisions that this is a realistic target but it can be achieved only with hard work,” Jokowi told reporters after his meeting with PLN staff and employees.
Prolonged permission processes as well as delayed land acquisitions due to protests from local residents have marred power-plant development in the country and have raised concerns over the country’s ability to realize the ambitious 35,000 MW project, which will be influential in supporting economic growth.
Jokowi said the government would continue to be directly involved in settling any problems.
“Resolving problems is impossible without knowing the real situation in the field. It’s necessary to be directly involved,” he said.
In particular, he pointed out several actions from himself, Vice President Jusuf Kalla and PLN’s president director in settling the stalled development of the Batang coal-fired power plant in Central Java.
The President was greeted with a surge in share prices that propped up the Jakarta Composite Index (JCI) by 0.7 percent to close at 5,523, the highest level in the local stock market’s history. Jokowi expressed optimism that the JCI could soar to 6,000 before the end of the year, because of sustained foreign fund inflows. “This reflects a vote of confidence among investors in our country, as people still have faith in the outlook of the Indonesian economy,” the President told reporters.
The State Palace’s protocol staff said Jokowi also intended to visit Kwitang — a subdistrict in Central Jakarta known as the city’s foreign exchange trading center — to talk with local dollar dealers about developments in the currency market. However, he canceled the plan without giving a detailed reason.
The rupiah also strengthened to below Rp 13,000 per US dollar , according to the Jakarta Interbank Spot Dollar Rate (JISDOR). Having weakened to the 13,100-level this month, the currency stabilized recently as concerns over the US interest rate hike subsided.
“As soon as the state budget is disbursed, our economy will liftoff, with an improved investment climate boosting the confidence [of investors] that can strengthen the rupiah,” Jokowi said.
Jokowi’s visit came amid growing criticism of the government’s implementation of a number of its policies, such as the government’s decision to annul a plan to impose taxes on toll roads, as well as a plan to require banks to report tax cuts on time deposits.
The policies have been cancelled despite the country’s desperate need for money to finance its infrastructure-spending program.
Indonesia might face a potential revenue shortfall of Rp 282 trillion according to the World Bank, which predicted a possible swelling of the fiscal deficit due to Jokowi’s overly ambitious tax collection target.
Other than the tax policies, the President also backtracked on implementing a new visa-free policy to attract tourists, a new regulation increasing car-purchase allowances for lawmakers and on the censorship of extremist websites, after the policies attracted significant media coverage.
Prior to his IDX visit, Jokowi visited state-owned electricity firm PLN on Tuesday to encourage the company to continue to be optimistic regarding the completion of a large power procurement program of 35,000 megawatts (MW) in five years. Observers fear it is unrealistic.
“This is not an easy target. Previously, we failed to realize the development of 10,000 MW in eight years. I have said to [PLN] management, general managers and heads of divisions that this is a realistic target but it can be achieved only with hard work,” Jokowi told reporters after his meeting with PLN staff and employees.
Prolonged permission processes as well as delayed land acquisitions due to protests from local residents have marred power-plant development in the country and have raised concerns over the country’s ability to realize the ambitious 35,000 MW project, which will be influential in supporting economic growth.
Jokowi said the government would continue to be directly involved in settling any problems.
“Resolving problems is impossible without knowing the real situation in the field. It’s necessary to be directly involved,” he said.
In particular, he pointed out several actions from himself, Vice President Jusuf Kalla and PLN’s president director in settling the stalled development of the Batang coal-fired power plant in Central Java.
http://www.thejakartapost.com/news/2015/04/08/jokowi-shores-market-confidence-amid-growing-concerns.html
Direct Speach:
“As soon as the state budget is disbursed, our economy will liftoff, with an improved investment climate boosting the confidence [of investors] that can strengthen the rupiah,” Jokowi said.
Indirect Speach:
Jokowi said as soon as the state budget was disbured, our economy would liftoff, with an improved investment climate boosting the confidence (our investors)that could strengthen the rupiah.
