Susilo Bambang Yudhoyono, the Indonesian president, on Thursday pledged to promote entrepreneurship and education reform as part of his push to raise economic growth to 7 per cent by the end of his term in 2014.
Speaking after being sworn in for a second term last week, Mr Yudhoyono also promised to streamline government bureaucracy. He said successful implementation of his plans would reduce unemployment to 6 per cent from 8 per cent. His efforts would lower the poverty level to as low as 8 per cent from 14 per cent.
Indonesia’s economy has been one of the best performers this year on the back of strong domestic demand and peaceful parliamentary and presidential elections. This has prompted huge inflows to local capital markets, pushing the stock market up 80 per cent and the rupiah more than 10 per cent.
Over the past two days, however, investors have started to take profits, driven partly by a global aversion to risk in emerging markets. The stock market fell 2.9 per cent on Wednesday and was down 1.6 per cent in late afternoon trading on Thursday. The rupiah has fallen more than 1.5 per cent over the same period.
Mr Yudhoyono was speaking at the opening of an unprecedented two-day “national summit” that brought together central and regional government leaders, businesspeople and non-governmental organisations to identify the greatest problems hampering growth and determine how they could be solved.
He said clarifying overlapping regulations and removing bureaucratic blockages, which he described as a “sickness”, would be a priority.
“Many goals are not met because there are so many bottlenecks,” he said. “Spatial planning [for example] has not been done right so the forestry department clashes with the environment ministry, energy ministry, agriculture and others. And on top of that, the laws are not right.”
The only change the president made from his first-term cabinet structure was to create a presidential “delivery unit” to oversee such challenges.
Mr Yudhoyono warned in his speech, broadcast live, that economic development would only come if Indonesians invested in their own country instead of waiting for outside help.
The president said the government would allocate Rp20,000bn ($2.1bn, €1.4bn, £1.3bn) to bolster small and micro enterprises, which account for more than a third of the country’s workforce.