Finance Minister: Debottlenecking Becomes Structural Reform to Face Energy Crisis

Amid the energy crisis triggered by the current war, an important lesson drawn is that Indonesia’s resilience is rooted not in emergency measures, but in structural reforms implemented well before the crisis. Jakarta (ANTARA) - Indonesian Finance Minister Purbaya Yudhi Sadewa stated that the establishment of the task force for handling business obstacle complaints, or debottlenecking, is one of the structural reforms taken by Indonesia to maintain national resilience, including from the energy crisis. This was conveyed by Purbaya as part of the IMF-World Bank Spring Meeting agenda from 13-17 April in Washington, DC, United States. “Amid the energy crisis triggered by the current war, an important lesson drawn is that Indonesia’s resilience is rooted not in emergency measures, but in structural reforms implemented well before the crisis,” Purbaya said in an official statement received in Jakarta on Monday. Purbaya stated that the ongoing conflict in the Middle East serves as a reminder that efficiency in processes and permitting is key to energy resilience. In this regard, the formation of the Task Force for Accelerating Government Strategic Programmes (P2SP) to accommodate complaints about obstacles faced by the business world is one of the important reforms that has been taken by Indonesia. Indonesia is also accelerating reforms by simplifying permitting and reducing barriers in energy imports. The Finance Minister added that for developing countries like Indonesia, the main concern regarding external imbalances lies in potential risks, including volatility in capital flows, inflationary pressures, and spillover effects from the global financial system. Although the war transmits shocks through energy prices, shipping costs, and currency volatility to the Indonesian region, the Finance Minister stated that Indonesia’s macroeconomic stability remains maintained compared to many other countries facing the same pressures. He acknowledged that Indonesia recorded a foreign exchange outflow of 1.8 billion US dollars and rupiah depreciation, but Indonesia’s fiscal deficit remains below 3 percent and foreign exchange reserves remain adequate. This is believed to be evidence that macro-financial credibility functions at the most critical times, including in strengthening energy resilience. On the other hand, amid global price adjustments, the yield on 10-year government bonds has relatively increased, but remains within government assumptions. This credibility enables Indonesia to absorb higher energy prices without sacrificing support for vulnerable groups or breaching Indonesia’s fiscal deficit limits.