TEMPO.CO, Jakarta - An investment grade rating given by Moody's Investors Service and Fitch Rating to Indonesia must be appreciated.
However, it would be better for the government to not only wait for investors to make investment in the country.
The government has many unfinished jobs so investors can really make investment here.
Fitch Ratings have given an investment grade rating in May 2016.
Fitch considers that Indonesia is worth for investment due to the low government’s debt, which is 26.8 percent from the gross domestic product.
Meanwhile, economic growth this year is projected to reach 5.1 percent and the risks to the banking sector is limited.
One of the problems that the government still has to settle is to improve the country’s ease of doing business index that is still at number 109 this year.
The position is far below the position of our neighboring counters such as Brunei Darussalam (84), Thailand (49), or Malaysia (18).
The point that made Indonesia has a low index from the World Bank as the one that gives the rating is the ease to start business.
Last year, Indonesia’s ease of doing business index was still at number 163 and this year Indonesia’s rank has dropped to number 173.
Another minus point is the availability of electricity supply.
The government has made efforts to ease the process of obtaining business permits by launching 12 economic policy packages gradually since last year.
Unfortunately, for businessmen, the efforts are not enough.
The difficult land acquisition to start a business, whose authority lies in the regency and city government, remains a big problem.
Barriers in land acquisition have also posed problems to the projects of building roads and power plants.
Economic growth in the first quarter of 2016 that reached 4.92 percent from the targeted 5.3 percent should also serve as an early warning because after it was investigated, it turned out that the weak economic growth was triggered by the low budget absorption of government’s spending.
The old disease has re-emerged.
Although it was fast in January, budget absorption for the government’s spending slowed down again in the next months.
The behaviors of regional governments that love to park finds for development in banks have also not stopped yet.
Until the end of April this year, the amount of funds for regional governments in parked in banks reached Rp220 trillion.
President Joko Widodo was also angry because during the period, there was virtually no capital spending or good spending done by regional governments.
However, the problem won’t be solved by anger. Instead, the President must urge bureaucracy both at the central government and regional governments to move fast.
The government must immediately disburse its budget for capital and good spending.
From the demand side, people’s purchasing power must be maintained by controlling inflation rate.
Without improvement in all sectors, the investment grade rating will not be used maximally.
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