IMF Rolls Out Recommendations To Boost Indonesia’s Public Investment Effectiveness
The International Monetary Fund (IMF) has recommended a number of action plans for Indonesia to take after the organization noted that the Asian country lacks effectiveness in its local public investment initiatives. The findings came ahead of Wednesday's general elections.
According to The Jakarta Post, National Development Planning Minister Bambang Brodjonegoro delivered the IMF's message to the Indonesian government following the bilateral meetings held to discuss public investment management assessment (PIMAs) during the weekend.
Bambang said initial PIMA findings from the IMF indicated that there was a 37 percent gap in the country's public investment effectiveness. The figures are significantly lower than what other emerging markets in the Asian regions received from the international body.
The IMF then provided a set of action plans that the Indonesian government could adopt. Bambang said these include improving processes for project selection, identifying projects under the National Medium-Term Development Plan (RPJMN), and enhancing budget frameworks.
Recommendations to improve the Indonesian government's public investment initiatives came ahead of the much-anticipated single-day general elections in the country. Economists noted that the IMF's suggestions may be used by the presidential election's winner to improve Indonesian economy.
Political analysts have weighed in on the issues surrounding what was dubbed as the "most complex" election in history. Singa Consulting Founder and Managing Principal, Carol Rollie Flynn, noted that the United States and other countries should take note of Indonesia's elections on Wednesday.
Indonesia is still one of Asia's most democratic countries and it also boasts of many natural resources. Flynn stressed the importance of the elections in global trade as it holds the record of the world's fourth-largest population.
Meanwhile, earlier polls suggested that incumbent President Joko "Jokowi" Widodo may dominate this year's presidential elections. It was also predicted that the Indonesian market may crumble if the results bring about an upset victory for Jokowi's second-time rival, Prabowo Subianto.
"If there was an election surprise, I think the markets will crash. The currency will probably crash," chairman of the Indonesian Investment Coordinating Board, Tom Lembong, said last month of a potential surprise win by underdog Prabowo.
Lembong noted that investors have been signaling confidence in Jokowi sweeping a win for the second time. He added that Jokowi's government if he wins, will continue to open up the Indonesian market for investments.
For Lembong, it is important that the Jokowi administration "move quickly" to regain composure due to delayed reforms that the "Obama of Indonesia" promised during his first term. He said the government should prioritize fixing issues within last year's negative investment records.