What are the Economic & Social Development Targets of Joko Widodo?

With a ballooning fuel subsidy bill (the previous administration allocated nearly USD $23 billion for fuel subsidies in 2015), a wide current account deficit (primarily caused by costly oil imports to meet domestic fuel demand) and a rising state budget deficit, the Indonesian government finally - after weeks of uncertainty - decided to wind down generous fuel subsidy spending a bit further. Indonesian Finance Minister Bambang Brodjonegoro staid that this fuel price hike saves IDR 120 trillion (USD $9.8 billion) in the 2015 state budget. Moreover, recent declining oil prices also imply that the government has more fiscal room. Combined, this may push the state budget deficit back to below 2.2 percent of (estimated) gross domestic product (GDP) in 2015.

Indonesian Energy Subsidies:

Year  Fuel Subsidies
 Electricity Subsidies
2015          276.1                68.7
2014          246.5               103.8
2013          210.0                99.9
2012          211.9                94.6
2011          165.2                90.4
2010           82.4                57.6
2009           45.0                49.5
2008          139.1                83.9
2007           83.8                33.1
2006           64.2                30.4
2005           95.6                 8.9
2004           69.0                 2.3

in trillion rupiah

Inflation, however, is expected to accelerate to between 7.5 and 8.0 percent (year-on-year) by the end of December. To combat inflation, Indonesia’s central bank raised its key benchmark interest rate (BI rate) by 25 basis points from 7.50 percent to 7.75 percent in last week’s (unscheduled) extraordinary meeting. Inflationary pressures are a risk because it can lead to an increasing poverty rate as around 60 million Indonesians live just above the poverty line and can easily be pushed into poverty in times of inflationary shocks. As such, part of the funds that are saved through reducing fuel subsidies will be reallocated to social welfare programs. For example the recently introduced Indonesian Health Card (Kartu Indonesia Sehat, or KIS), Indonesian Smart Card (Kartu Indonesia Pintar, or KIP) and Indonesian Prosperous Card (Kartu Keluarga Sejahtera, or KKS). Through these programs, introduced in early November, poor households obtain better access to healthcare and education. Furthermore, the government will use direct cash transfers to those poor households that have not received these cards yet.

Infrastructure Targets Joko Widodo Administration (2014-2019):

Subject               2014
National Road Condition               94%              100%
Logistics Costs (% of GDP)             23.5%             19.2%
Market Share Public Transportation               23%               32%
Electrification Ratio             81.5%             96.9%
Per Capita Power Consumption           843 kWh         1,200 kWh
Household Gas Network       102,000 (SR)       192,000 (SR)
Access to Drinking Water             68.5%             100%
Access to Sanitation             60.5%             100%
Slum Area             12.5%               0%
Houses Backlog         13.5 million          6.8 million
Water Supply Capacity         51.4 m³/sec      1118.6 m³/sec
Per Capita Storage Capacity            62.3 m³            78.4 m³
Reservoir-based Irrigation               11%               20%
Irrigation Network Coverage    7,1456 million Ha     7,915 million Ha
Flood Prevention Design        5 to 25 years     10 to 100 years

Source: Investor Daily