Indonesian leader pledges `massive deregulation' to stimulate economy
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Jakarta (dpa) - Indonesian President Joko Widodo on Wednesday pledged to introduce massive deregulation as soon as possible to stimulate the economy and attract investment.
An economic slowdown and a slumping rupiah has sparked fears of a repeat of the 1997-98 financial crisis which crippled Indonesia's economy.
"Our economy is in a much better shape compared to 1998 or 2008,"Joko told a cabinet meeting, citing the banks' capital-adequacy ratio at above 20 per cent, higher than the minimum 14 per cent. But he said the country was "racing against time" and swift action was needed.
"Massive deregulation is needed to provide a favourable climate for the economy as soon as possible," he said.
The rupiah is trading at a 17-year low of about 14,000 to the dollar, while the stock market index has lost 20 per cent this year. The economy grew 4.6 per cent in the second quarter, the slowest pace in six years.
Joko said bureaucracy was getting in the way of projects to build much-needed infrastructure for economic growth. The government said last week it was preparing a big stimulus package to shore up growth and increase foreign exchange reserves. The measures include widening tax holidays for investors and other policies aimed at keeping macroeconomic stability.
