Cyclical prospects unexciting, but foundations being laid for recovery
SINGAPORE (Nov 25): President Joko Widodo, or Jokowi as he is fondly called, began his second term at the end of October. His new administration was fully in place by early November when all his senior cabinet officials as well as deputy ministers had been sworn in.
What should we expect from Jokowi’s team? The first thing they have to do is tackle a less-than-promising cyclical outlook: That will require carefully calibrated counter-cyclical measures to minimise risks to the rupiah or the fiscal position. This is something that Jokowi’s able technocrats can do. The bigger challenge will be to pull off a longer-term acceleration in economic growth. That will require policymakers to make more sweeping changes to address a series of deeply rooted structural weaknesses. Since these will almost certainly arouse opposition while also potentially causing some short-term pain, it will require careful political management.
