New points in revised LoI<\/p>\n
Ten economic recovery acceleration program<\/p>\n
I: Creating stability in the financial sector<\/p>\n
1. Strengthen the financial sector in order to improve the
\neconomic fundamentals. Improvement of indicators in the real
\nsector should be followed by improvement of indicators in the
\nfinancial sector.<\/p>\n
2. Increase coordination and synchronization of fiscal and
\nmonetary policy between the Economic Team and Bank Indonesia (the
\nIndonesian Central Bank).<\/p>\n
3. Improve the trust and create positive expectation among the
\ninvestors and the public at large towards the recovery of
\nnational economy.<\/p>\n
II. Boost export increase<\/p>\n
1. Utilize the excess capacity in the manufacturing industry
\nsector to boost export.<\/p>\n
2. Utilize the excess liquidity in the banking sector to boost
\ncredit lending, both for working capital credit as well as
\ninvestment credit, for export-oriented activities.<\/p>\n
3. Promote the creation of a competitive and hazard free business
\nenvironment in order to boost export.<\/p>\n
4. Utilize the momentum of a competitive Rupiah value in order to
\nboost export.<\/p>\n
III. Increase the Productivity and Welfare of Farmers<\/p>\n
1. Conduct seed policy programs in order to boost productivity in
\nthe agriculture sector and increase the income of farmers.
\nThrough the seed policy, productivity could be increased in the
\nsame area of land.<\/p>\n
2. Promote the mechanization process in Indonesia's agriculture
\nsector, especially for area outside of Java, in order to increase
\nagricultural productivity.<\/p>\n
3. Choose the top 20 agricultural commodities to be intensively
\ndeveloped in order to be competitive in the domestic as well as
\ninternational market.<\/p>\n
4. Promote processing industries in order to increase the quality
\nand added value of agricultural products, especially post-
\nharvesting processing.<\/p>\n
5. Promote the development and use of technology in order to
\nincrease agricultural productivity.<\/p>\n
IV: Acceleration of banking and private sector restructuring<\/p>\n
1. Conduct internal restructuring, both to the management and
\nbusiness, for the re-capitalized banks in order to be healthier,
\nmore prudent, competitive and profitable.<\/p>\n
2. Promote the establishment of a consolidated national banking
\nstructure, but not concentrated through merger and acquisition
\namong banks.<\/p>\n
3. Persuade banks to provide bigger credit allocation for small
\nand medium scale businesses as an effort to improve the loan
\nportfolio quality of the banking sector.<\/p>\n
4. Apply a more profitable exit strategy for the government, in
\nselling the assets of the banking sector.<\/p>\n
V: Prioritize on equity-based recovery instead of loan-based
\nrecovery<\/p>\n
1. Increase the support from multilateral organizations, such as
\nthe IMF, World Bank, Asian Development Bank, OECD, Islamic
\nDevelopment Bank, etc.<\/p>\n
2. In order to accelerate Indonesia's economic recovery and
\ncreate millions of job opportunities, the government should
\nsupport infrastructure projects with the following criteria:<\/p>\n
2.1. It should create many job opportunities, whether
\ndirectly or indirectly.<\/p>\n
2.2. It should promote the development of economy in the
\nrespective region.<\/p>\n
2.3. It should create maximum economic benefit to the local
\ncommunity near the infrastructure project.<\/p>\n
2.4. It should be feasible both economically and financially,
\nin order to attract domestic and foreign investors.<\/p>\n
3. In order to finance the infrastructure projects, the
\ngovernment should emphasize on the participation of domestic and
\nforeign investors by maximizing the leverage from multilateral
\nloans or G-to-G. It is expected that infrastructure projects in
\nthe area of Gus Dur-Megawati should be cheaper comparing to the
\nNew Order Era due to the decrease in KKN (collusion, corruption,
\nand nepotism).<\/p>\n
VI. Value-creation privatization<\/p>\n
1. Avoid fire-sales of assets belonging to SOEs and IBRA by
\ncreating an added value before privatization is conducted through
\nbusiness as well as financial restructuring.<\/p>\n
2. Value-creation privatization will be conducted for sectors
\nthat has appeal to foreign investors, such as telecommunications,
\ntransportation, estate crops, hotel and tourism, infrastructure,
\nas well as oil and gas.<\/p>\n
3. The government should promote foreign parties to be majority
\nshareholders as secondary operators through an open, fair and
\ntransparent tender process. With the increasing number of foreign
\nparties as majority shareholder, the secondary operators could
\nattract foreign loans with competitive interest rates in order to
\nincrease additional investment. The majority shareholder of prime
\noperators should be in the hands of the government.<\/p>\n
4. Try to maintain the government's long-term buy-back share
\noption.<\/p>\n
5. The government should promote to the people to own shares of
\nSOEs, either through the capital market or in form of unit
\ntrusts.<\/p>\n
VII.Conduct economic decentralization<\/p>\n
1. Apply Law No.22\/1999 and No.25\/1999, especially in aspects
\nthat deal with economic decentralization. The decentralization
\nprocess should be conducted in stages in order to maintain macro
\nand fiscal balance between the central and local government.<\/p>\n
2. Promote the implementation of economic decentralization in the
\nlocal level, namely in areas of basic infrastructure development,
\nsuch as hospitals, schools, etc.<\/p>\n
3 Boost economic development in the regions through trade and
\ninvestment cooperation between areas and regions.<\/p>\n
VIII: Utilize the natural resource endowment<\/p>\n
1. Promote the optimum utilization of maritime resources by
\ntaking into consideration the principles of sustainability and
\nenvironmental safeguards.<\/p>\n
2. Promote reform in the maritime sector and provide attractive
\nincentives for the participation of the private sector, both
\ndomestic and foreign, in order to maximize the state revenue from
\nthe maritime sector.<\/p>\n
3. Participation of the traditional fishermen in the utilization
\nof maritime sector is a must, through the modernization of fish
\ncatching equipment.<\/p>\n
4. Conduct gradual liberalization in the oil sector, especially
\nin the downstream industry. Through this strategy, it is expected
\nthat efficiency in processing, distribution and marketing in the
\noil sector could increase, therefore increasing the government's
\nrevenue.<\/p>\n
5. Provide incentive in the upstream industry from the oil and
\ngas sector in order to attract investor in increasing the supply
\nof oil and gas.<\/p>\n
6. Conduct domestic gas policy to increase the domestic use of
\nnatural gas in order to minimize the energy sector cost for
\nindustries and households. This policy would minimize the
\ndomestic use of oil, therefore increasing the proportion of oil
\nto be exported which automatically increase the government's
\nrevenue.<\/p>\n
IX: Boost the development of micro, small and medium scale
\nbusinesses<\/p>\n
1. Increase the credit allocation for micro, small, and medium
\nscale entrepreneurs through experienced and reputable financial
\ninstitutions in managing micro, small and medium scale credits.<\/p>\n
2. Increase the incentive for financial institutions, in form of
\nadministrative subsidies and technical supports for micro, small
\nand medium scale businesses.<\/p>\n
3. Promote the development of primary products in the existing
\nproductions centers by providing financial and non-financial
\nsupport.<\/p>\n
4. Promote the integration, modernization, and credit expansion
\nto traditional financial institutions.<\/p>\n
5. Provide tax incentive, administrative ease and support the
\nestablishment of a competitive business climate in order to
\nincrease productivity of small and medium scale enterprises.<\/p>\n
6. Conduct revision towards financing schemes of micro, small and
\nmedium scale businesses.<\/p>\n
X: Increase the people's welfare in the rural areas in order to
\nstrengthen socio-political stability<\/p>\n
1. Increase the level of real rural wages by improving the terms
\nof trade for agricultural commodities.<\/p>\n
2. Accelerate infrastructure projects in the district (kecamatan)
\nand rural sub-district (pedesaan) level, such as tertiary
\nirrigation, rural roads, etc. as part of the strategy to increase
\nreal rural wages. The government is planning to increase the
\nvolume of this program comparing to the previous years.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-points-in-revised-loi-1447893297",
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"sponsor": "Okusi Associates",
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