Thursday, 15 October 2015

The unstimulating stimulus

Not pointing in the right direction

IN EARLY September, Joko Widodo, Indonesia’s president, promised a “massive deregulation” aimed at attracting foreign investment. Outsiders were thrilled. Mr Joko’s predecessor, Susilo Bambang Yudhoyono, left the country’s business climate choking on what Adam Schwarz, a consultant, calls “a regulatory miasma” that strongly discouraged investment, whereas Mr Joko, best known as Jokowi, has openly courted foreign capital.

Over the past six weeks his administration has unveiled a series of deregulatory measures. On September 9th the government made it easier for foreigners to open bank accounts, struck down import restrictions on goods such as tyres and cosmetics that were designed to protect local industries, and eliminated some onerous and silly business regulations. No longer, for instance, must Indonesian-language labels be affixed to imported goods before they arrive; now they can be printed in Indonesia and attached before public circulation.

A couple of weeks later Jokowi cut the time required to process some investment permits, and cut taxes for exporters who...Continue reading

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