"We are currently facing fundamental economic challenges, but the government is prepared for it," he remarked during a meeting with academicians and members of the business community.
He affirmed that the countrys economy is currently experiencing a slowdown, as the engine for economic growth can no longer be relied upon.
"Our economy is ending its old cycle and leading to a new one. This is a fundamental transition from consumption to production and investment," he noted.
President Widodo stated that the engine of growth, driven by the exports of raw material commodities, is no longer productive, as the prices of commodities have sharply declined.
"We can no longer delay implementing a fundamental economic reform although it will be painful. There is no gain without pain. A lot of countries have failed to upgrade their engines of growth and have even pledged welfare without hard work. They are now on the brink of collapse. Indonesia must prevent it," he said.
The president emphasized that Indonesia must set up a new economic growth engine.
"What is now needed is a revolution in the managerial culture," he said.
To deal with currency depreciation, for instance, he suggested that the producers must not immediately raise the prices of their products but must instead seek ways to curb the prices and change the distribution and production system in order to make it more efficient.
"This has been going on for years while the high prices of products and services would only make our country less competitive," he pointed out.
He affirmed that in order to meet the challenge, the government in the short term will conduct economic stabilization, including on the prices of essentials.
He noted that government spending will also be optimized while awaiting the emergence of the new growth engine.
"We will exploit the available fiscal room," he added.
He said the government would also source investment funds from Japan, Korea, China, Singapore, Germany, and the United States.
"The funds are needed for investment to increase productivity and not for subsidy or consumptive projects," he remarked.
(Reporting by Agus Salim/Uu.H-YH/INE/KR-BSR/A014)