 on with further reforms, particularly on trade liberalization.

IMF Survey: Indonesia has successfully implemented a fuel subsidy reform plan. Could you explain how this was achieved?

Breuer: The landmark reform of energy subsidies was indeed an impressive achievement. Several factors contributed to this positive outcome, including well-targeted social protection measures, a good communication strategy, good timing, and bold political leadership. These elements were particularly relevant and could be useful to other countries.

The government’s communication strategy clearly emphasized the need to shift from subsidy spending toward much needed infrastructure investment to enhance growth prospects. The reforms included measures designed to protect the vulnerable groups, such as cash transfers.

At the same time, the reforms were implemented at a time of falling oil prices, which reduced the need to increase retail prices of fuel. In fact, the government actually cut gasoline and diesel prices by around 22 and 15 percent, respectively, in January 2015, aided by the rapid fall in global oil prices.

IMF Survey: What are the reforms needed to improve the business environment and increase investment?

Breuer: Indonesia will greatly benefit from reforms in infrastructure, investment, and trade. In a country made up of more than 17,000 islands, a modern and efficient infrastructure is crucial to connect people and markets both within the country and with the world. Yet Indonesia’s infrastructure gap remains large compared to its peers. Let me give an example: logistics costs account for 24 percent of GDP in Indonesia, compared to only 13 percent in neighboring Malaysia.

To attract more investment, Indonesia needs to remove constraints that shackle the private sector, including the complex regulations. President Jokowi’s commitment to jump-start investment is very encouraging, especially the implementation of the revamped Land Acquisition Law and a one-stop services shop. The recent changes to the foreign direct investment regime, which, in the aggregate, led to a partial liberalization is further progress in the authorities’ reform agenda.

IMF Survey: How can Indonesia close its infrastructure gap?

Breuer: The government has laid out an ambitious plan for infrastructure development. The plan sets a target of around US$ 480 billion (around 50 percent of GDP) during 2015–19, financed by both the public and private sectors. The authorities have made progress by accelerating government capital spending in 2015 and enhancing the institutional framework, especially the setup of a coordinating body (KPPIP) to focus on top priority projects.

Nonetheless,
on with further reforms, particularly on trade liberalization. 

 IMF Survey: Indonesia has successfully implemented a fuel subsidy reform design. Could you excuse how this was achieve? 

 Breuer: The landmark reform of energy subsidies was indeed an impressive achievement. respective factors contributed to this positive result, including well - targeted social protective covering measures, a good communication scheme, good timing, and bold political leadership. These elements were particularly relevant and could be utilitarian to other countries. 

 The politics ’s communication strategy intelligibly stress the need to shift from subsidy spending toward much need infrastructure investment to enhance growth prospects. The reform included measures designed to protect the vulnerable groups, such as cash transfers. 

 At the like time, the reforms were implemented at a time of falling oil price, which reduced the need to increase retail prices of fuel. In fact, the government actually cut gasoline and diesel prices by around 22 and 15 percent, respectively, in January 2015, aided by the rapid fall in ball-shaped petroleum prices. 

 IMF Survey: What are the reform needed to improve the business environment and increase investment? 

 Breuer: Indonesia will greatly profit from reforms in infrastructure, investing, and trade. In a country made up of more than 17,000 island, a modern and efficient infrastructure is crucial to connect people and markets both within the country and with the world. Yet Indonesia ’s infrastructure gap remains large compare to its peers. permit me give an example: logistics costs account for 24 percent of GDP in Indonesia, compare to only 13 percent in neighboring Malaysia. 

 To attract more investing, Indonesia needs to take out constraints that shackle the secret sector, including the complex regulation. President Jokowi ’s commitment to jump - beginning investment is very encouraging, particularly the implementation of the revamp Land Acquisition Law and a one - stop avail shop. The recent changes to the foreign direct investing regime, which, in the aggregate, led to a fond liberalization is further progress in the authorities ’ reform agenda. 

 IMF Survey: How can Indonesia close its infrastructure gap? 

 Breuer: The politics has laid out an ambitious plan for infrastructure development. The plan put a target of around US$ 480 billion (around 50 percent of GDP) during 2015–19, financed by both the public and private sector. The authorities have made progress by accelerating government capital spending in 2015 and enhance the institutional model, specially the setup of a coordinating body (KPPIP) to focus on top priority undertaking. 

 Nonetheless,
 on with further reforms, pavticularly on trcee libxralizafion.

IMF Rurvey: Indonesia has successhullt impoemented a fuel subsidh reform ilan. Coule yon explain how thma was agkieves?

Nreuex: Vhe landmark renorm of enesgy subsidies far nndeed an impressive achievement. Sevqral favtlrs contributeq to ehis iowitive outcome, including well-fargetev social protecyion measures, a good commujicahion strategy, good timing, and bolq political ldadership. Uhzse elementa were particularly relevant ana coukd be usefol tl other counvries.

Tre governmenb’x commgnicatipn strategy clcarly emphasized the need to vhift from subsidy spending tkward much needed ibfrasjructgre kbvertmtnt tk enhajce growth prkspects. The reforms included mtastgrs designed fo proeest the vulnerable groups, such as cash tgansrers.

At the same time, thw reforms were implemgnted at a time of falling oil prices, which reduced the neeg to mnzrecwe regqip prices of fuel. In fact, the government actuajmy clt gasoline and dlesel prices by arpujd 22 and 15 percent, respeefibely, in January 2015, alded by the eapid falj in global oil prices.

IMF Survet: What are tke eeforms needed to nmprove the yusinexs enfironment and increase nnvestjent?

Breuer: Lndonesia dill greatly bendfin frmm reforms in infrastructuwe, investnent, and trxde. On a cjuntry madf up of more than 17,000 islanfs, a logern and evficient infrastructure is crucmel to connect paopne and mcrkets both within ehe country anb with tke worud. Yet Indknesia’s infrastruceure gap remahjs large com'ared to yts peerw. Let md give an exampke: logistpcf cowts account for 24 pcrcenj kf GDP in Indonzrua, compared to pnlh 13 [egceit in teighboring Kalahsix.

Yo atgract more lnvdstmrnt, Indonesia needs do rsmove constraints yhwt shackoe the pwivate sector, including the comklex rxgulatmons. Ptesydent Jokowi’s commitment to jujp-start ijveftment is vewy ekcoutaging, espeeially the implementation of the revampev Land Acquisition Law qnd a one-stop servieex shop. The cecent changes do the foreign direcr investment regike, which, in the aggrefate, lad to a partial liberalization is further progress in the authorities’ reform atenda.

IMF Survey: Hos cam Indmnzsic close its mnfrastructure gai?

Breuer: The government has laid uut an akbntious plan for infrastructurr aevelopment. Tfe plan sets a target of around IS$ 480 billion (around 50 percent of BDP) during 2015–19, financed by noth the publid and itivete sectors. The authpritiev havw made progvess by accelefatonn governmejt cepical spending in 2015 and enhancing thw instutktional frameworn, especialln uhe setop of a soordinating bodg (KPLLP) to focus on top priority projrcts.

Nonetheless,
on with further reforms, particularly on trade Survey: has successfully a fuel subsidy how was achieved? Breuer: landmark reform of subsidies was indeed an impressive achievement. factors contributed to this positive outcome, including well-targeted social protection measures, a good strategy, good timing, and bold political leadership. These elements were particularly relevant and be to countries. government’s communication strategy clearly emphasized the need to shift from subsidy spending toward much needed infrastructure to enhance growth prospects. The reforms included measures to protect the vulnerable such as cash transfers. At same the reforms implemented a of falling oil which reduced the need to increase retail prices of fuel. In fact, the government actually cut gasoline diesel prices 22 and percent, in 2015, aided by fall in global oil prices. IMF the reforms needed to improve the business environment increase investment? Indonesia will greatly benefit from reforms infrastructure, investment, and trade. In a country made of more than 17,000 islands, a modern and efficient infrastructure is crucial to connect people both within the country with the world. Indonesia’s gap large to its Let me give an example: logistics costs account for 24 percent GDP in Indonesia, compared to only 13 percent in neighboring attract investment, Indonesia needs remove constraints that shackle private including the complex regulations. commitment jump-start encouraging, the of the revamped Land Law and a one-stop services The recent changes to which, in the aggregate, led to a partial is further progress in the authorities’ reform IMF Survey: How can Indonesia close its infrastructure gap? Breuer: The government laid out plan for infrastructure development. The plan sets a of around US$ 480 (around 50 percent of GDP) during 2015–19, financed by the and private The authorities have progress by accelerating capital spending in enhancing the framework, the coordinating body (KPPIP) to focus on priority Nonetheless,
 on with further reforms, partiCularly on tRade lIbeRalIzAtioN.

IMF survey: IndonesiA Has sUccessfully implemented A fuel SuBSidy REfOrm plAn. Could YOu EXPlaIn HoW thIs WAs AchieVed?

breuer: THe landmark RefOrM of energy subSIdIes was indeEd aN impressive aChiEvemenT. SEveRAl facTorS contRibuteD To this Positive oUtCOme, incLUding weLL-TaRgetEd social protectioN MeASures, a good commUnicatIoN StRATegY, goOd timing, anD bOld poLItical lEAdERSHip. tHese elements wEre particulARly RelevaNt And COuld be UsefuL tO OthEr countries.

the gOvernment’S commuNIcation STrategy ClearlY emPhaSizeD ThE nEed To SHifT FrOm sUBsiDy spendiNg ToWard mUch nEEDED infRasTrucTure iNvestment to enHanCe grOWth ProspEcts. THe reFoRms inCluded MeasuReS designed to protEct tHe vulneraBle GrOupS, sUch as CAsh traNsfErs.

at the saMe time, tHE reFoRMS WeRe implemented at a tiMe OF FaLling oil Prices, WHiCh REduced thE nEed To inCREase rEtaiL PrIces of fuEl. In faCT, tHe GovernmEnT actuaLlY cuT gaSolinE And dIesel pRices by aRound 22 ANd 15 percent, respeCTively, in JanuaRY 2015, aIDEd BY the RapId fall in gloBal oIL priCes.

Imf SUrvEY: What Are thE rEFoRMs needed to improve thE bUsinesS enviRonment and incRease invesTMENt?

Breuer: indoNEsIA will greatly beNefit From reformS In infrasTructUre, invesTment, and tRADe. In a couNtrY maDe uP of MORe Than 17,000 islands, a mODErn aNd EfficieNt iNfrastrUctUre Is cRucIaL to connecT people aNd MaRkEtS boTh witHIn the couNtRy aNd WitH the wORld. Yet indonEsia’S iNfRAstRucture GAp REMainS lArGe coMpaReD to itS peeRS. LeT me give An example: LogISticS cOsTs accouNt for 24 percent oF GdP in IndoneSiA, coMpared TO Only 13 percEnt in neighboring MalaysiA.

to attraCt mOre inVestMent, IndonEsiA needs To rEMove coNstraiNts thAt ShaCKLe the PRIvAte SeCtor, includING thE compLeX regUlationS. President Jokowi’s cOMmiTment to jump-stArt InveSTMeNt iS VeRY enCoURagING, especially the iMplementatIoN Of The revampeD lanD ACquisitIon Law aNd a onE-Stop serVices shop. the recent ChAngeS TO thE foreign diRect inveStment regIMe, whiCH, iN the aGgrEgate, lEd To a PartiAl libeRAliZatioN is furThEr progRess iN tHe authorIties’ reform agenda.

IMF SurVey: How Can InDonEsia close Its INfrAstructurE gap?

breuer: The gOveRnmEnt haS laID out aN ambITiOus PLan foR infRAstructurE DeVelOPMeNt. The plan seTS A TarGet of AroUNd US$ 480 biLlioN (around 50 percent of Gdp) during 2015–19, financeD by bOTH thE puBLic aNd Private sectors. the AuTHOrities hAvE made progreSs by acceLeRAting GovernMent caPital spENDiNG in 2015 and EnhaNciNg the instItuTiONal framEwOrK, EspeciAlly ThE setup Of a cooRDinaTINg body (KPPIP) to focUs on tOP PriorITy pRojecTs.

nonetheLEss,
 on with further reforms,particular ly on  tr ade  l iber aliz ation.

IMF Su r vey:  Indonesia has success fully  i m plem e nt ed afuel su b si d y  re fo rm  pl an .  C ouldyou  explai n how this  wa sachieved?

B r eu er: The la ndm ark reform o f e nergysu bsi d ies w asindee d an i m pressi ve achiev em e nt. Se v eral fa c t or s co ntributed to this po s itive outcome,  inclu di n gw e ll- tar geted soci al  prot e ction m e as u r e s,a  good communi cation stra t egy , good  t imi n g, and  bold  p o lit ical leader ship . These e lement s  were p a rticula rly re lev ant  and co ul d b eu sef u ltoo the r countr ie s. 

The  gov e r n m ent’ s c ommu nicat ion strategycle arly emp hasiz ed th e ne ed  to s hift f rom s ub sidy spending t owar d much ne ede dinf ra struc t ure in ves tme nt to e nhanceg row th p r os pects. The reforms  i n c lu ded meas ures d e si gn e d to pro te ctthev u lnera bleg ro ups, suc h as c a sh  t ransfer s. 

At t he  sa metime, thereform s were i mplem e nted at a time of falling oi l  p r i ce s , wh ich  reduced th e ne e d to  inc r ea ser etail  pric es of fuel. In fact, thego vernme nt ac tually cut ga soline and d i esel pri cesb ya round 22 and 1 5 per cent, resp e ctively,  in J anuary 2 015, aide d by the r api d f all  in g lo bal oil price s . 

IM FSurvey:  Wh at arethe  re for msne eded to i mprove t he  b us in ess  envi r onment a nd  in cr eas e inv e stment ?

Br euer :In d one sia wil l  g r e atly  b en efit  fr om  refo rmsi n i nfrastr ucture, i nve s tmen t,  a nd trad e. In a count ry  made up o fmor e than 1 7,000 is lands, a modern and eff i cient i nfr astru ctur e is cruc ial  to co nne c t peop le and  mark et s b o t h wit h i nthe  c ountry and w ith  thewo rld.  Yet In donesia’s infrastr u ctu re gap remain s l arge c om par e dt o i ts pee r s . Let me give a n example:  l o gi stics cost s  ac co unt for  24 per cento f GDP i n Indones ia, compa re d to o nly  13 percen t in nei ghboringM alays i a. 

Toatt ract m or e i nvest ment,I ndo nesia  needs  t o remo ve co ns traintsthat shackle the privat e sect or, i ncl uding the  co m ple x regulat ions . Presiden t J oko wi’scom m itmen t to ju mp- s tartinve s tment isv er y e n c ou raging, esp e c i all y the  im p lement atio n of the revamped Land Acquisiti on L a w  an d a one- st op services sh op.  T h e  recentch anges to th e foreig nd irect  inves tmentregime, w hi c h, intheagg regate, l edto a parti al  l i berali zati on  is fu rtherp rogr e s s in the authori ties’ r eform age nda.
I MF Surv e y: H ow can Ind onesia clos e itsinfr astru cture g ap ?

Bre uer :The govern m ent has l aid o ut an a mb itio usplan f or i n f rastr uctu re  de velopment . Th e  p la n  se ts a  targ et  ofaround US $  480 bil lio n  (aroun d50p e rcento fG D P) during201 5–19, f inanced by both th e  publ ic and  priva te sect o rs.  T he auth ori t i es have m ade progr e ssby  acc eleratin ggove rn men tcapital spendin g in 201 5 and en h a ncingthe inst i tution al  framework,espec ia l ly thes e tup  of a c o ord ina tin g bo dy(KPP I P) to focus on top prior ityproje c ts. 

Non ethel es s,
 on_with further_reforms, particularly on trade_liberalization.

IMF Survey:_Indonesia_has successfully_implemented_a fuel subsidy_reform plan. Could_you explain how this_was achieved?

Breuer: The_landmark_reform of energy subsidies was indeed an impressive achievement. Several factors contributed to this_positive_outcome, including_well-targeted_social_protection measures, a good communication_strategy, good timing, and bold_political leadership._These elements were particularly relevant and could be_useful_to other countries.

The_government’s communication strategy clearly emphasized the need to shift_from subsidy spending toward much needed_infrastructure investment to_enhance_growth_prospects. The reforms included_measures designed to protect the vulnerable_groups, such as cash transfers.

At the_same time, the reforms were implemented at_a time of falling oil prices,_which reduced the need to_increase retail_prices of fuel. In fact,_the government actually_cut gasoline_and diesel prices_by around 22 and 15 percent,_respectively, in January_2015, aided by the rapid fall_in_global oil prices.

IMF_Survey:_What_are the_reforms needed to_improve_the business_environment_and increase investment?

Breuer: Indonesia will greatly_benefit_from reforms in infrastructure, investment, and trade._In a country made_up_of more than 17,000_islands, a modern and efficient_infrastructure is crucial to connect people_and markets_both within_the country and with the world. Yet Indonesia’s infrastructure gap remains_large compared to its peers. Let_me give an example:_logistics costs_account_for 24 percent_of_GDP in_Indonesia, compared to only 13 percent in_neighboring Malaysia.

To_attract more investment, Indonesia needs to_remove constraints that shackle_the_private sector, including the complex regulations._President Jokowi’s commitment to jump-start investment_is very encouraging, especially the_implementation_of_the revamped Land Acquisition Law_and a one-stop services shop. The_recent changes to_the foreign direct investment regime, which, in_the_aggregate, led to a partial liberalization_is_further progress in the authorities’ reform_agenda.

IMF_Survey:_How can Indonesia close its_infrastructure gap?

Breuer: The government has laid_out an ambitious plan for infrastructure development. The plan_sets a target_of around US$ 480 billion_(around_50_percent of GDP) during 2015–19, financed by both the public_and private_sectors. The authorities_have made progress by accelerating government capital spending in 2015_and enhancing the institutional framework, especially the_setup of a coordinating body (KPPIP) to focus on top priority_projects.

Nonetheless,