This is going to be a rare post about Jokowi's administration. I rarely ever comment about politics, simply because I am not a trained politician. However, I do have my two cents about this administration and their progress so far. So, let's begin:
Joko Widodo, the incumbent president of Indonesia, won the election by promising a lot of populist and leftist policies. A few examples of these promises include: 1) free healthcare through Kartu Indonesia Sehat, 2) allocating IDR 1.4 billion to every village, 3) subsidy of IDR 1 million for every poor family, 4) create 10 million new jobs through IDR 10 million payments to Koperasi and/or small medium enterprises, and 5) creation of new transportation infrastructure of 10 new airports and 10 new seaports. Lofty goals, aye?
In terms of the spirit, these policies aim to reduce economic inequality - a great aim, given the negative impact of economic inequality towards a society. To quote Wikipedia (yes, I'm quoting Wikipedia):
"Effects of inequality: Researchers have found include higher rates of health and social problems, and lower rates of social goods, a lower level of economic utility in society from resources devoted on high-end consumption, and even a lower level of economic growth when human capital is neglected for high-end consumption."
Like what we see above, the goals are great. But we also have to remember, execution often matters more than the goals. And that's where I have concerns with the Jokowi administration.
First of all, financing these policies is not cheap - the money has to come from somewhere (or as Rihanna puts it, Bit*h Better Have My Money). With falling oil prices (and by proxy, revenue), Jokowi's administration has to rely on increases from tax revenue to fuel government spending. Our latest finance minister, Bambang Brodjonegoro, has set out to increase taxes by 30%. That's a very ambitious goal, given that usually tax revenues increase by about 6% annually. What's even scarier, is what the finance minister says about tax compliance:
"Of more than 250 million Indonesians, only 27 million register as taxpayers. Among that group, only 10 million actually submit taxes, and only 900,000 paid what they owed last year."
So it seems like there's a lot of room for tax revenues growth, right? We can target those who haven't paid taxes yet. Ummm, not really. If we see the recent tax edicts by the ministry of finance, we've probably added the burden of tax to those who are paying. Their tax edicts focus on a few things: 1) tax amnesty, 2) increasing tax rates for PPN (property), 3) increasing VAT.
A criticism on tax amnesty: those who don't pay (and are perfectly capable of doing so) have sent their money away to Singapore, Switzerland, Cayman Islands, British Virgin Islands, and other tax havens. Asking them to bring their money home from offshore is close to impossible - Indonesia doesn't share financial information with these countries. Money stays where money feels at home, where there is good tax infrastructure, low tax rates, stable currency, and clear government policies. If you can't give that, there's no way these people will comply. As for increasing property taxes, apartment sales have felt the effects from constant flip-flops in property taxation policies. The increasing property taxes certainly don't help either. And as for VAT, realistically, when consumer spending is low (like now), increasing VAT is just slowing down economic growth.
Secondly, Jokowi's administration is frustratingly flip-flopping policies all the time. Let's take a look at a few policies in which their stances have changed over a short period of time: canceling a presidential regulation on substantial rise in car-purchase allowances, changing a proposed visa-free policies for 30 countries as it will break immigration law, and re-opening AND re-closing censorship from 22 websites under pressure from Muslim groups. Like, seriously? The only person who flip-flops more than Jokowi's administration is a 15-year old teenager who decides that he'd rather be grunge than punk.
This shows a great problem in policymaking from the Jokowi administration. Why aren't policies comprehensively studied before executed? Have you read these policies before you signed them? To quote Jokowi:
“I don’t know 100 percent of the content of [drafts and documents submitted to the President]. This should be handled by ministries. They should screen whether the drafts will have a good or bad impact on the country,”
This is the worst thing I've heard from a president. Please do not tell me you do not know what you signed because you don't read. The last time someone told me they don't like reading, I almost had a mini heart attack in a restaurant (yep, these are also things you don't tell girls on a first date - note to guys who want to take me out on a date). To hear that a president doesn't read is just unacceptable and unprofessional.
Those are my biggest concerns with the current administration: financing and firm policymaking. Unless we correct for these things, we won't be able to progress as expected. So, I hope that I have voiced out my concerns - and that Jokowi can fix these things moving on forward.
