The Focus of the 2008 – 2009 Economic Program

The purpose of most Presidential Instructions is to provide guidance and in most, if not all, instances the demands they contain are not legally binding or enforceable. However, this does not mean Presidential Instructions can be ignored.

A Presidential Instruction highlights the intent and direction of government policy and in the case of Presidential Instruction No. 5 of 2008 it is the focus of the 2008 – 2009 economic program.

This particular Presidential Instruction is directed to the Cabinet and is designed to put into place a framework for government business over the course of the next 12 to 18 months. The Presidential Instruction follows on from Presidential Instruction No. 6 of 2007 which focused on the development and expansion of micro, small, medium enterprises (usaha micro, kecil, dan menengah / UMKM) in the real sector.

The Presidential Instruction itself is not as important as the Attachment that it contains. It is the Attachment that sets out all the directives that the various government departments and agencies are tasked with achieving.

Essentially, the Coordinating Minister of Economic Affairs is responsible for ensuring the implementation of the Presidential Instruction and then reporting the outcomes to the President.

In terms of regulatory development the Attachment sets out a number of outcomes to be achieved. For example by June 2008 there is supposed to be Presidential Regulations, Head of the Capital Markets and Financial Institutions Supervisory Agency Regulations, and a public policy relating to the single entry point for capital investment confirmed and released.

Furthermore, the Attachment includes guidelines for the development of new tax regulations relating to land taxes and valuations for taxable objects. There are also to be Department of Transport regulations issued that are designed to ensure that ports can expedite the export and import of goods. There are also to be additional regulations issued to clarify the national single window framework for customs purposes.

Historically some departments and agencies have failed to meet the targets stated in previous Presidential Instructions and therefore it would not be wholly unexpected that the same will occur again. Nevertheless, it is expected that these targets will be met.

The Presidential Instruction was confirmed on 22 May 2008.