Indonesia’s President Joko “Jokowi” Widodo has instructed his ministers to slash regulations for every new rule issuance, inspired by a story shared with him by US Secretary of Commerce Wilbur Ross about President Donald Trump’s deregulation agenda.
At a recent cabinet meeting on job creation, Jokowi told his Indonesia Onward ministers that regulations that are slowing down the investment in local businesses and restricting job creation should be slashed.
“Recently, Secretary Ross told me that there, if any minister wanted to issue a regulation, he/she needed to revoke two regulations,” said Jokowi at the Presidential Office on Monday.
“We should be able to do that as well. For every regulation issued by a minister, they need to annul 40 ministerial regulations because we have too many ministerial regulations.”
The information that secretary Ross seemingly conferred to Jokowi is likely to be the executive order signed by US President Donald Trump on 30 January 2017. Said order required government agencies to revoke two regulations for every new regulation issued without incurring more costs of compliance to the new regulation.
Since taking office, courting foreign investors to create more jobs has been one of Jokowi’s key agendas. His enthusiasm for attracting foreign investment is echoed in his victory speech after the election, in which he said “no one should be allergic to investment”, particularly those that create jobs in the country.
As of August 2019, open unemployment in Indonesia sat around the 5.28 per cent area. This is only slightly lower than the 5.34 per cent that was recorded over the same period in 2018.
In absolute terms, however, the number of unemployed people increased by 50,000 between August 2018 and August this year, while 2.5 million people gained employment over the same period.
In line with efforts to implement deregulation, Jokowi also emphasised the need for bureaucratic reform. Currently, the processes and mindsets of civil servants are heavily procedure-oriented. Jokowi wishes to change this mind-set into a more results-oriented one.
Investment, which accounts for around a third of GDP, only grew 4.21 per cent in the third quarter, Statistics Indonesia (BPS) data showed, dropping from growth of 6.96 per cent recorded over the same period last year.
