Institute for Development of Economics and Finance (Indef) senior economist Didik J. Rachbini has warned that the successful implementation of Indonesia's economic stimulus policy package will depend on President Joko "Jokowi" Widodo's leadership, in which political turmoil appears to be the biggest challenge he needs to resolve.
"It will be difficult to get economic recovery if ministries and non-ministry government institutions continue to fight. As we've seen they have continued to quarrel with each other," the economist said in Jakarta on Saturday.
"The rupiah exchange rate has worsened and it could soon reach Rp 15,000 (S$20,000) to the US dollar if the unconducive situation is not resolved," he went on.
Didik acknowledged that Jokowi's popularity had waned because of his strategic policies, which were considered weak, following intensified conflict and rivalry within his government.
"The success of the government's economic policy packages will depend on whether President Jokowi's communication and political power run well," he added.
Didik further said the government should improve the bureaucracy, which was considered poorer than in many other countries.
"There will be no improvement, even if the government deregulates [business and investment] licensing procedures, if our bureaucracy performance is still not good," he stated.
Indef researcher Imaddudin Abdullah said deregulation and de-bureaucratization measures offered in the second economic stimulus package should be appreciated because there was more focus on providing convenient investment licensing and facilitation.
Unfortunately, he said, the offered deregulation and de-bureaucratization measures seemed to be provided to solve problems in the central government only.
In fact, regional autonomy regulations stipulate that some licensing procedures should be carried out at the regional level. "At the regional level, licensing procedures are still very bureaucratic and take quite a long time," he said.