What are Joko Widodo's Economic & Social Development Targets?

With a ballooning fuel subsidy bill (the previous administration allocated nearly USD $23 billion for fuel subsidies in 2015), a wide current account deficit (primarily caused by costly oil imports to meet domestic fuel demand) and a rising state budget deficit, the Indonesian government finally - after weeks of uncertainty - decided to wind down generous fuel subsidy spending a bit further. Indonesian Finance Minister Bambang Brodjonegoro staid that this fuel price hike saves IDR 120 trillion (USD $9.8 billion) in the 2015 state budget. Moreover, recent declining oil prices also imply that the government has more fiscal room. Combined, this may push the state budget deficit back to below 2.2 percent of (estimated) gross domestic product (GDP) in 2015.

Indonesian Energy Subsidies:

Year	Fuel Subsidies	Electricity Subsidies
2015	276.1	68.7
2014	246.5	103.8
2013	210.0	99.9
2012	211.9	94.6
2011	165.2	90.4
2010	82.4	57.6
2009	45.0	49.5
2008	139.1	83.9
2007	83.8	33.1
2006	64.2	30.4
2005	95.6	8.9
2004	69.0	2.3

^{in trillion rupiah}

Inflation, however, is expected to accelerate to between 7.5 and 8.0 percent (year-on-year) by the end of December. To combat inflation, Indonesia’s central bank raised its key benchmark interest rate (BI rate) by 25 basis points from 7.50 percent to 7.75 percent in last week’s (unscheduled) extraordinary meeting. Inflationary pressures are a risk because it can lead to an increasing poverty rate as around 60 million Indonesians live just above the poverty line and can easily be pushed into poverty in times of inflationary shocks. As such, part of the funds that are saved through reducing fuel subsidies will be reallocated to social welfare programs. For example the recently introduced Indonesian Health Card (Kartu Indonesia Sehat, or KIS), Indonesian Smart Card (Kartu Indonesia Pintar, or KIP) and Indonesian Prosperous Card (Kartu Keluarga Sejahtera, or KKS). Through these programs, introduced in early November, poor households obtain better access to healthcare and education. Furthermore, the government will use direct cash transfers to those poor households that have not received these cards yet.

Infrastructure Targets Joko Widodo Administration (2014-2019):

Subject	2014	2019
National Road Condition	94%	100%
Logistics Costs (% of GDP)	23.5%	19.2%
Market Share Public Transportation	23%	32%
Electrification Ratio	81.5%	96.9%
Per Capita Power Consumption	843 kWh	1,200 kWh
Household Gas Network	102,000 (SR)	192,000 (SR)
Access to Drinking Water	68.5%	100%
Access to Sanitation	60.5%	100%
Slum Area	12.5%	0%
Houses Backlog	13.5 million	6.8 million
Water Supply Capacity	51.4 m³/sec	1118.6 m³/sec
Per Capita Storage Capacity	62.3 m³	78.4 m³
Reservoir-based Irrigation	11%	20%
Irrigation Network Coverage	7,1456 million Ha	7,915 million Ha
Flood Prevention Design	5 to 25 years	10 to 100 years

^{Source: Investor Daily}

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