Jokowi’s Sea of Troubles

As Indonesia prepares for incoming President Joko “Jokowi” Widodo taking office in October, the transition is rough. The government faces a range of challenges, including a need to reduce fuel subsidies. The outgoing president dashed hopes that he would launch the needed reductions. Fuel subsidies represent 14 percent of the budget, reducing government spending on infrastructure and social programs. Even with proposed cuts in subsidies, Indonesians would pay about 75 US cents per liter, below the global average. The country also confronts need to reduce high electric tariffs and a property bubble; lift a ban on the export of raw ores and minerals; and referee a new law that will force foreign firms to divest all but 30 percent of their planation holdings – the limit is currently 95 percent – to Indonesian owners. Foreign ownership of all types of assets is under question, and the Asia Sentinel suggests concern is emerging that “international investors are becoming disillusioned with what had been one of the globe’s most attractive investment destinations.” - YaleGlobal