The government is preparing new measures to help narrow the gap between the country’s rich and poor in a bid to improve consumer demand, which is essential to stoke private investment.
The government is in the process of finalizing the upcoming policies, which are expected to be issued in the next one or two months, said Sofjan Wanandi, chief economic advisor to Vice President Jusuf Kalla.
“The government will soon issue some policies to resolve the issue of the gap between the rich and the poor and we hope this will help stabilize the economy in the long term,” he said during a panel discussion held by the Indonesian Chamber of Commerce and Industry’s (Kadin) advisory board on Tuesday.
The government expects that businesspeople will fully support the policies, one of which will include a plan to tax idle plot of lands that would help generate extra revenue, he added.
Meanwhile, Creco economist Chatib Basri said private sector investment was needed to trigger the economy to grow above 5 percent.
He said Indonesia remained attractive among other emerging markets as shown by the recent high demand for government bond issuance, but the implementation of new regulations to facilitate private companies was yet to be effective so far.
“We need to convince more foreign direct investments to come to the country, but the deregulation efforts introduced by the central government to cut bureaucracy have not touched its regional counterparts,” he said.