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Indonesia’s new leader promises to make life easier for investors

Reuters

Indonesia’s new president, Joko “Jokowi” Widodo, promised to make life simpler for investors by beefing up the country’s threadbare infrastructure, untangling near-impenetrable regulations and sacking his ministers if they aren’t up to the job.

The Elections Commission announced Tuesday that the Jakarta governor had won the hard-fought July 9 election by just over 6 percentage points, although his rival, Prabowo Subianto, plans to challenge the result in Constitutional Court.

“We need to get our economy growing. To do that we must have more investment and also deliver in terms of infrastructure,” Jokowi told Reuters in an interview Saturday, given on the condition that it not be published until after he was officially named winner.

A lack of roads, ports, electricity and other basic services, along with corrupt bureaucracies, is beginning to disenchant foreign investors, essential for the resource-based economy to grow.

“(Investors) say getting business permits is very complicated. Some investors say they need two years. Imagine. So if we can give solutions for getting business permits, I’m sure that we can improve the infrastructure faster.”

Jokowi is the first businessman to become president of Indonesia, which took all six of its previous leaders from a political elite. His simple, direct approach and success in cutting through red tape appealed to ordinary voters. And investors have been pushing up share prices on expectations he would become leader of the world’s third-largest democracy and home to its biggest Muslim population.

Jokowi’s humble “I’m just like the rest of you” style has made him the country’s most popular politician and it is an image he is careful not to lose, repeatedly referring to his time as mayor of Solo, a small city, and later as the capital’s governor.

He has rented a small, plainly furnished house in central Jakarta while he waits to move, in October, into the sprawling presidential palace in central Jakarta, which began life in the 18th century as home to a wealthy Dutch businessman in the colonial era. Outside were three security guards in plain clothes.

Jokowi, in bare feet and dressed in white shirt and dark trousers, made clear he understood his presidential honeymoon could be brief.

There is little in the state coffers to address pressing problems from declining economic growth to rising poverty. But he has shown in Jakarta talent for finding money in the budget and has come down hard on officials who do not perform.

That, he said, is a policy he will take to the presidential office.

“If (ministers don’t succeed) there are more than a thousand other good people in Indonesia to replace them. I can cut and then replace them. It’s very simple for me,” he said.

“They have to be clean, they have to be competent, they have to have good leadership (skills) and a commitment to serve the people.”

He has faced accusations, which he denies, that he will be under the thumb of the chief of the party that supports him, former President Megawati Sukarnoputri.

Jokowi repeatedly said during his presidential campaign he would not trade Cabinet jobs for political support.

But in the interview, he acknowledged for the first time that around 20 percent of his Cabinet will likely be political appointments from parties that backed him.

The threat of being fired is an unusual risk for ministers. For years, the biggest threat most Cabinet members have faced is a reshuffle into a less significant role.

One finance minister was forced to resign three years ago because, in the view of many analysts, she was a little too effective in tackling the rampant graft that has so long weighed down Southeast Asia’s biggest economy.

SHORT ON SPECIFICS

But Jokowi was short on specifics. “Too much detail,” said his aide when the president-elect was asked exactly how he would handle such issues like a ban imposed this year on exports of unprocessed minerals. The law is meant to boost national revenues, but has worried investors by its confused implementation and suggestion of rising nationalism.

First, said Jokowi, he will immediately set a transition team to discuss how to allocate top government positions and which issues to set as priorities.

He pointed to the massive fuel subsidies, which now cost about a fifth of the annual state budget but which economists say do more to help the wealthy than the 40 percent of the population which live in or close to abject poverty.

“We should move the subsidies to the farmers for their fertiliser or infrastructure for their irrigation. To the fishermen, we can give … engines for their boats … if we move the subsidies from fuel to productive activities, we will have more productivity,” he said.

“I think a first important thing is also to make regulations clearer. Because some of the regulations are not clear,” he said.

“In my experience as mayor and governor it’s not difficult. It’s just a different scale. It’s only about management.” (Additional reporting by Randy Fabi; Editing by Larry King)