In coordination with the central bank (Bank Indonesia) and the Financial Services Authority (OJK), the central government will implement this stimulus package per September 2015 with the aim to create a conducive macroeconomic environment (particularly by revitalizing the real sector) hence boosting the country’s economic growth that has slowed to the six-year low of 4.67 percent (year-on-year) in the second quarter of 2015.

The first phase of this package encompasses three policies. The first one is to boost Indonesia’s industrial competitiveness through deregulation, curtailing red tape (bureaucracy), and by enhancing law enforcement as well as business certainty. President Widodo said there are currently 89 regulations that have been restructured from a total of 154 regulations that were under investigation (on grounds of inefficiency, which particularly involves the presence of overlapping or duplicated regulations) in order to strengthen coherency and consistency, while slashing regulations that were blocking further development of the nation’s industrial sector.

The government has already prepared 17 draft government regulations, 11 draft presidential regulations, 2 draft presidential instructions, 63 draft ministerial regulations, and 5 other regulations.

The second policy of the package involves the acceleration of strategic projects of national interest through the elimination of all obstacles in order to accomplish realization of these projects. Over the past couple of years, quite a few infrastructure projects in Indonesia have been delayed or cancelled altogether as there were serious bureaucratic bottlenecks and land acquisition problems. The new package aims to smoothen the process to obtain necessary permits and land acquisition for such projects as well as to speed up procedures for the procurement of land, goods and government services. Widodo stated that the regional governments will have a bigger role to play in order to secure the smooth realization of infrastructure projects that are of national strategic importance.

The third policy involves (raising) investment in Indonesia’s property sector. The central government will push for special housing for the low income households, while widening investment opportunities in the nation’s property sector.

A document published by Indonesia’s Economics Ministry provides some further details (but not all) about these three policies within the first installment of the stimulus package.

By altering existing regulations it will be made easier for companies to obtain import permits for products such as sugar, salt, textiles, cosmetics, tires and pearls.

To boost the country’s tourism industry, Indonesia will ease visa requirements for foreign visitors.

To increase palm oil and mineral exports the government will simplify physical checks related to export tax.

To boost the country’s energy and mining sector, Indonesia will remove certain document requirements.

The government will issue new regulations to promote special economic zones.

For certain strategic industries Indonesia will provide a temporary subsidy for gas consumption.

In October the value added tax (VAT) will be removed in the transportation sector in order to lower logistic costs.

To boost the domestic property sector, the Indonesian government will allow foreigners to own luxurious apartments/condominiums that have a price tag of at least IDR 10 billion (approx. USD $700,000).

The government will raise the threshold of “luxury apartment” implying that the cheaper ones will no longer be subject to the country’s luxury tax.

The government will revise a 12-year-old system on wage setting in order to enhance legal certainty for employees.

The government plans to provide more rice under its rice subsidy program.

The government will transfer more funds to the villages. Part of these funds are to be used for infrastructure development.

LPG-to-fuel converter kits will be handed out to fishermen to make fishing more energy-efficient.

In cooperation with Bank Indonesia, the government aims to stabilize food prices and safeguard controlled inflation. Regarding beef imports, Indonesia will look at more countries to find competitive prices.

Will the new stimulus package succeed in boosting Indonesia's economic growth?

Voting possible:  -


  • No, it's just talk, no action (37.1%)
  • Yes, it will boost investment & consumer spending (25.7%)
  • I don't know (20%)
  • No, turmoil is due to external factors, not domestic ones (17.1%)

Total amount of votes: 105