Survey of Recent Developments

Amid global economic uncertainty and tumbling world oil prices, Indonesia�s economy pressure on its external balance and a continued growth slowdown. The government President Joko Widodo (widely known as Jokowi) has set an agenda of reform, including, faster investment licensing, historic cuts to fuel subsidies to generate fiscal, and increased spending on infrastructure. On the political side, Jokowi has had to with several political issues coming not only from parties in opposition but also from supporting his government, including during the formation of the new cabinet. We the consequences so far of the government�s policy initiatives and of the policymaking. While some initiatives have been implemented with success, some seem to been launched without enough preparation, consultation, or empirical evidence, and have been poorly communicated. Although inflation accelerated after the November -price rise, efforts have been made to contain inflationary expectations and to mitigate effects on poverty through social-assistance programs. The government took steps to the impending impacts of higher fuel prices on vulnerable households by giving handouts of Rp 200, 000 per month to 15. 5 million disadvantaged families who receive lowest level of welfare, and by promoting publicly funded education and health care. partial removal of gasoline subsidies and the introduction of a fixed-subsidy policy diesel in the revised 2015 budget reduce uncertainty about the fiscal position, although in government spending in infrastructure development were announced at the time. The revised budget for 2015 increases spending on infrastructure development 63% from the 2014 budget, mostly on projects to improve connectivity on land and sea�such as the development of toll roads, railways, and ports�and to increase the of the agricultural sector. However, the recent drop in international oil prices the government to increase its target for tax revenue by 30% on last year�s target, concerns about the effect of falling oil prices on the economy. Trade and investment reform is important in unlocking Indonesia�s growth potential and improving the �s current external balance. Jokowi�s administration, however, has been sending signals about its position towards more open policies. The country has yet to recommence trade negotiations that were postponed in 2014 and is still struggling to its commitments under the ASEAN Economic Community. Although improvement investment procedures and licensing is currently underway, Indonesia needs to adopt a positive attitude if it is to attract more investment.