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Joko, Prabowo Outline Their Economic Strategy in Kadin Dialogue

Joko, Prabowo Outline Their Economic Strategy in Kadin Dialogue

By Tito Summa Siahaan on 10:15 pm Jun 22, 2014

Jakarta. Presidential candidates Joko Widodo and Prabowo Subianto and their running mates had equal time and a fair chance to outline their economic strategies to members of the Indonesian Chamber of Commerce and Industry on Friday.

It appeared, however, that by the end of the event the local business community was more convinced by the direction of Joko’s detailed micro-economic approach rather than Prabowo’s broadly stated grand vision.

In the event, which was officially dubbed a “dialogue,” both candidates were challenged with questions from members of Kadin. The questions centered on food security, infrastructure, finance, industry and energy, small and medium enterprises and regional development.

Kadin has hosted such event for each presidential election since 2004.

First to take to the podium was Prabowo Subianto and running mate Hatta Rajasa. The former three-star general started his session by saying that the objective of his administration was prosperity for all Indonesians.

“We all know how great and rich our economy is. But during my trip, I found that Indonesia was not one. There are three Indonesias — Indonesia in the 21st century, Indonesia in the 19th century and Indonesia in the pre-industrial period,” said Prabowo, making reference to the development gap. Therefore, he said, the country needed a new approach to development policies.

“We need multi-track development — for those who are already in the 21st century, go out and compete. But for those who are still left behind, they are the obligation of the government.”

The first issue to be raised was Prabowo’s plan to improve food security by converting degraded forests into productive farmland.

Prabowo said Indonesia had a 20-year window of opportunity to become self- sufficient in food and energy, to improve welfare, education, health and family planning policy in a race against a “population explosion.”

Prabowo said, if elected, his administration’s priority would be replacing the current universal subsidy policy to a more targeted subsidy.

“Our objective is to reduce the subsidy by a half or two thirds within three years,” Prabowo said. “And in the next four to five years, our goal is to keep the subsidy cost at minimum.”

During his turn, Joko began by saying that Indonesia had tremendous economic resources but had failed to take the decisions to develop them their full potential.

“Therefore, there are three key issues. The first one is not infrastructure, but human development. Why? Because human development improves our productivity, our work ethic and ultimately our ultimate goal of improving competitiveness.”

Infrastructure

Next, Joko raised the issue of infrastructure, which he said was improving too slowly due to problems with financing, permitting and land acquisition — issues the government must address.

“These issues are actually easy [to solve], as long as we know the condition on the ground,” he said.

Joko also touched on the issue of regulatory hurdles, promising to remove those regulations that are not pro-businesses and pro-investment.

Jusuf Kalla, Joko’s running mate, said that, if elected, their administration would prioritize the construction of a domestic oil refinery within their government’s first year. “This is the first thing that we must sort out … in the first year,” he said.

After six hours of dialog were up, it was apparent that Joko won more support from attendees than did Prabowo.

“Joko provided more detail and touched on more substantial details, while Prabowo was too general,” said a member of Kadin, who declined to be named.

Prominent businessman Rahmat Gobel said the visions of both candidates were pretty much the same.

“But Joko and Kalla were more concrete and rational in their plans,” he added.

Franky Sihombing, a member of Kadin, agreed with Rahmat, saying that Joko’s plans were more “doable.”

Peter G Fanning, chairman of the International Business Chamber, an informal gathering of foreign chambers in Indonesia, said Joko’s micro-approach is what the country needs right now. “Indonesia needs leaders that understand micro-economic issues. As for macro-economic issues, this country has plenty of qualified and good bureaucrats to manage that.”

But Kadin deputy Didie Soewondho said both candidates failed to disclose plans to fund their programs.

“If we boost infrastructure spending by reducing energy subsidies and move the money to infrastructure, it’s still business as usual.”

 

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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