Jakarta – President Joko "Jokowi" Widodo has ordered his ministers to prepare for a possible global recession in the coming months as the trade war between the United States and China continues.
"A recession is clearly on the cards. We must get our umbrella ready. Whether it will rain a lot or just drizzle, we won't get rained on," Jokowi said on Wednesday.
The World Bank's country director for Indonesia, Rodrigo Chavez, met the President on Monday and told him about the increased risk of global recession.
"We hope we've prepared concrete steps [to stave off the recession] and avoid the impact of the slowdown in economic growth," Jokowi said.
Bank Indonesia, the country's central bank, has cut its benchmark interest rate in the past two months as it seeks to reinvigorate Indonesia's slowing economic growth.
The government has set a growth target of 5.3 percent next year and to that end has maintained an expansionary spending policy.
Nevertheless, Jokowi said the key for Indonesia to avoid the recession is to increase the flow of foreign investment into the country.
"The quickest way is [to attract more] foreign direct investment. That's the key, there's no other," he said.
The president lamented the fact that all 33 companies that exited China recently did not choose to relocate their plants to Indonesia.
"Twenty-three chose Vietnam, the others went to Malaysia, Thailand and Cambodia," Jokowi said.
According to the president, this was down to the lack of bureaucreatic red tape in those neighboring countries. "It only takes two months to start building a new plant in Vietnam. It still takes years here," he said.
Jokowi said Indonesia's economic ministries must do their best to modify regulations that are holding back investments in Indonesia.
"We, as officials, should not wait to be served all the time. It's us who must go out there and serve," Jokowi said.