JAKARTA: Indonesia welcomed business chiefs and government leaders on Monday to Asia’s edition of the World Economic Forum (WEF), as calls mount for President Joko Widodo to do more to show his commitment to reform.
Some 700 participants are attending the event, known as “Asia’s Davos” in reference to the WEF’s annual global gathering in Switzerland, at the start of a busy week for Jakarta, which is also hosting a summit of Asian and African leaders.
Indonesia has enjoyed strong growth in recent years, driven by demand for its natural resources, foreign investment and a fast-emerging middle class. But expansion has been slowing as commodity prices fall.
Widodo, who came to office last year partly on a pledge to revive the economy, has vowed to improve the business climate and win new investment, and sees the WEF as a key platform to push his agenda.
He is due to speak later Monday at the gathering, which is also being attended by several cabinet ministers. Major companies, such as Coca-Cola and US oil giant Chevron are represented, as are regional leaders including Cambodian Prime Minister Hun Sen.
As sessions got under way Monday, Budi Gunadi Sadikin, chief of Indonesian state-owned Bank Mandiri, struck a positive tone: “I’m very positive and optimistic — in the next 15 years, 50 million Indonesians will enter the middle class.”
However, Widodo, who took power in October, has his work cut out to improve the investment climate, with investors put off in recent years by policies seen as nationalistic in the banking and mining sectors, and by complex bureaucracy.
Indonesia came 114th in the World Bank’s latest rankings on the ease of doing business, out of 189 countries. A nation ranked number one is deemed the easiest place to do business.
The president has taken some steps, almost entirely axing fuel subsidies that gobbled up a huge chunk of the economy in the early months of his administration, a move which freed up billions of dollars.
However, analysts said momentum appears to have slowed and accused the government of sending mixed signals. They pointed to a ban introduced last week on the sale of beer at small shops across the Muslim-majority country, which sparked anger from international brewers.
“If you want to roll [out]the red carpet, don’t squeeze them when they come,” said Yose Rizal Damuri from Jakarta think-tank the Centre for Strategic and International Studies.
A major focus for Widodo is improving infrastructure, with potholed roads and ageing ports a key complaint of investors — a problem all too clear for delegates arriving in the chaotic capital Jakarta, which suffers chronic traffic jams and has scant public transport.
A key theme at this year’s conference, which runs until Tuesday, is improving trust between countries in the region as geopolitical tensions risk undermining hard-won economic gains.