Republ blic ic of Indones esia ia Re Reform rms on The Mo Move, e, Stability bility Int ntact ct Febr bruary ary 2018
About ut Inves esto tor Relatio tions ns Unit of the Republic ublic of Indones I esia Investor Relations Unit (IRU) of the Republic of Indonesia has been established as a joint effort between Coordinating Ministry of Economic Affairs, Ministry of Finance and Bank Indonesia since 2005. The main objective of IRU is to actively communicate Indonesian economic policy and to address concerns of investors, especially financial market investors. As an important part of its communication measures, IRU maintains a website under Bank Indonesia website which is administered by International Department of Bank Indonesia. However, day-to-day activities of IRU are supported by all relevant government agencies, among others: Bank Indonesia, Ministry of Finance, Coordinating Ministry for Economic Affairs, Investment Coordinating Board, Ministry of Trade, Ministry of State Owned Enterprises, Ministry of Energy and Mineral Resources and Financial Services Authority. IRU also convenes an investor conference call on a quarterly basis, answers questions through email, telephone and may arrange direct visit of banks/financial institutions to Bank Indonesia and other relevant government offices. Published by Investor Relations Unit – Republic of Indonesia Website: http://www.bi.go.id/en/iru/default.aspx Contact: Wiwit Widyastuti (International Department - Bank Indonesia, Phone: +6221 2981 8279) Bhayu Purnomo (Fiscal Policy Office - Ministry of Finance, Phone: +6221 345 0012) I Gede Yuddy Hendranata (Directorate General of Budget Financing and Risk Management - Ministry of Finance, Phone: +62213510714) E-mail: contactIRU-DL@bi.go.id This Presentation Book also can be downloaded from: http://www.bi.go.id/en/iru/presentation/red/Default.aspx 1
Overvie rview Fiscal al Perfo rformanc ance and Flexibilit ibility: y: Instit itutio utional nal and Governan ernance Effectiv ivene eness: 4 1 More re Fiscal al Stimulus lus with Acceler lerated ted Reforms rms Agenda with Instit itutio utional nal Improvem ement ent Prud udent nt Fiscal l Mana nage gement nt Econo nomic ic Factor: Moneta etary ry and Financ ncial ial Factor: : 2 5 Strong ng and Stable le Growth wth Prospec ects Credible ible Monet netar ary y Polic licy y Track k Record rd and Favour urable ble Financ ncial ial Sector Remain in Intact Pro rogres gressiv ive e Infras rastr truc uctur ure Develo lopment ent: 6 3 Externa ernal l Facto tor: : Strong ng Commitm itment ent on Acceleratio leration n Impro roved ed Externa ernal l Resilien lience of Infras rastr truc uctur ture e Pro rovis isio ion 2
Sec ection tion 1 Institutio In utiona nal and Go Govern rnme ment nt Eff ffect ctiv ivenes eness: s: Ac Acce celerated ted Reform rms Ag Agenda with In Institutio utiona nal Im Improveme ment nt
Improving ving Global bal Percep ception tion …with recent improve vement nts on global al competit itive ivene ness and governan rnance ce indica cator Global l Compe petitive titivene ness Index 1 Ease of Doing ng Busin iness 2 Rank nk 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0 Rank Higher rank is better (rankings at the time of annual report publication) 20 20 Higher rank is better 40 30 36 36 41 41 60 72 40 40 40 91 80 50 109 100 114 60 60 60 120 121 122 123 128 129 129 120 68 68 70 71 71 140 80 Indonesia India Morocco Romania Hungary 160 Indonesia India Morocco Romania Hungary 90 Corruptio uption n Perce cept ptio ion n Index 4 World ld Governa nanc nce Indic icator tors 3 60 55 53 Higher score is better 50 55 50 43 50 39 48 35 33 45 45 40 40 37 Higher rank is better 35 15 2010 2011 2012 2013 2014 2015 2016 30 Voice and Accountability Political Stability/Absence of Violence 2012 2013 2014 2015 2016 2017 Government Effectiveness Regulatory Quality Rule of Law Control of Corruption Morroco Hungary Indonesia India Romania 1. Source: World Economic Forum – The Global Competitiveness Report 2017 – 2018; 2. Source: World Bank – Doing Business Report; 3. Source: World Bank; 4. Source: Transparency International – Corruption Perceptions Index 2017 Report 4
Improving ving Global bal Percep ception tion Indone nesia sia has improved its competi titi tive vene ness among ng ASEAN AN members rs.. .... .. I ndonesia’s transport infrastructure continues to improve Indo dones esia ia is inchin hing g its way up the com ompeti petitiven tivenes ess ladder der, , supp pported rted by massive ive infrastru tructu ture project ojects mov ovin ing g ahea ead d 5 places es GCI Rank Transpo port t Infastr tructu ture e Index ex Change e Change e Rank Countries ies Rank Countries ies in Rank in Rank 2017 2017-2018 2018 2016 2016-2017 2017 2017-2018 2017 2018 2016-2017 2016 2017 Singapo apore 3 2 1 Singapo apore 1 2 1 1 1 Mala lays ysia ia 23 23 25 25 2 Mala lays ysia ia 14 14 11 11 3 2 2 Thailand land 32 32 34 34 2 Indones nesia ia 30 30 36 36 6 3 3 Indones nesia ia 36 36 41 41 5 Thailand land 34 34 37 37 3 4 4 Brune nei Brune nei 46 46 58 58 12 12 63 63 70 70 7 5 5 Darussalam alam Darussalam lam Vietna nam 55 55 60 60 5 Vietna nam 64 64 63 63 1 6 6 Philip ilippines ines 56 56 57 57 1 Philip ilippines ines 90 90 90 90 7 7 Cambodia ia 94 94 89 89 5 Cambodia ia 108 108 102 102 6 8 8 Lao PDR 98 98 93 93 5 Lao PDR 109 109 110 1 9 9 Source: World Economic Forum – The Global Competitiveness Report 2017 – 2018 5
Indones esia ia is Now Fully ly Rated as as Inves estm tment ent Grad ade Countr try Fitch JCRA BBB / Stab able BBB BBB Dec 201 2017, BBB, Ratin ing g Upgra grade ded “ Indonesia's resilience to external shocks has steadily strengthened in the past few years, as macroeconomic policies have consistently been geared towards maintaining BBB- BBB stability. Moody’s R&I R&I S&P Investment Grade Below low Inve vestme tment nt Grade BBB- / Stabl BBB ble BB BB+ May 2017 17, BBB-, Ratin ing g Upgr graded ded “We raised the long-term sovereign credit to BBB- as the Indonesian authorities have taken effective expenditure and revenue measures to stabilize the public finances despite BB the terms of trade shock.” Baa3 a3 / Positiv ive BB- Feb b 201 017, Baa3, Outlook Revis ised ed to Posit itive “ We changed the outlook on Indonesia's sovereign rating to positive from stable to reflect emerging signs of a reduction in structural constraints, including its level of external vulnerability and the strength of its institutions.“ B+ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 BBB- / Positive BBB ive BBB BBB / Stab able Febr bruary 201 2018, , Ratin ing g Upgr graded ded to BBB BB, Outlook Revis ised d to Stabl ble April il 2017, 017, BBB-, Outlook Revis ised ed to Posit itiv ive e “ ....the government led by President Joko Widodo has been pressing ahead with structural “Indonesia's macroeconomics stability has been maintained for several reforms aimed to promote sustainable growth.. First, the investment climate has significantly years. Its external position is also improving,. fiscal deficits have been improved.... Second, infrastructure development has been gaining momentum... Third, the reined in and government debt is low. In light of such factors, coupled external debt owed by the private sector has been curbed since 2016... Taking those into with improved policy management, R&I has changed the rating outlook to consideration, JCR has upgraded its ratings by one notch and changed the outlook to Positive.’ Stable. 6
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