A Day Away Lagarde and Widodo

(Photo: The Insider Stories)

JAKARTA (TheInsiderStories) – President Joko Widodo (Jokowi) received the International Monetary Fund (IMF) Managing Director Christine Lagarde at the Merdeka Palace on Monday (26/2).

Lagarde was accompanied by Changyong Rhee, Director of the Asia Pacific Department, IMF, Gerard Thomas Rice, Director of Communications Department, IMF, and Jianhai Lin, Secretary of the IMF.

Also in attendance were John G. Nelmes, Senior Resident Representative for Indonesia, and Luis E. Breuer, Division Chief for Indonesia, Asia Pacific Department, IMF.

On the Indonesian side, Widodo was supported by a number of officials, including Governor of Bank Indonesia Agus Martowardojo, Finance Minister Sri Mulyani, Coordinating Minister for the Economy Luhut Binsar Panjaitan and Minister of National Development Planning / Head of Bappenas Bambang Brodjonegoro.

Widodo invited the IMF delegation to visit a traditional market, in Tanah Abang, Central Jakarta. They also visited Pertamina Hospital to see how government health and social security programs are working in a public facility.

(Photo: The Insider Stories)

Generally, Widodo intended to demonstrate to the guests the importance of the government’s efforts and seriousness in managing the market, while taking into account the real sector at the lowest level.

Gerry Rice, Director, Communications Department of IMF, explained that Lagarde’s visit is part of the run-up to the 2018 Annual Meetings, to be held in Indonesia in October of this year.

“Among other things, she will give the keynote address at the opening of a conference that the Bank of Indonesia is co-hosting with the IMF, and that’s going to be on the topic of new growth models in a changing global landscape,” said Rice in an official statement.

In the recent IMF annual economic assessment report, the IMF focused on reforms that support innovation and job creation to boost potential growth and economic diversification in Indonesia, with particular attention to the digital economy.

The IMF urged stakeholders to enhance the country’s infrastructure to access information and technology. Also, upgrading worker skills—particularly digital literacy—to meet the demands of a digital economy.

They also urged the government to streamline regulations and encourage the entry of foreign firms and skilled labor to further boost competition and stimulate innovation.

IMF also warned how the rise of a digital economy comes with a number of risks, including cyber-risks. Large-scale automation can exacerbate job destruction and raise income inequality.

In the financial sector, emerging technologies, including virtual currencies, could disrupt established financial institutions and lead to a migration of financial dealings outside the regulated sector.

By striking a balance between addressing risks from digitalization and supporting innovation, policies can help Indonesia reap digital dividends.

To discuss ways to deal with these challenges, Bank Indonesia and the IMF are organizing ‘New Growth Models in a Changing Global Landscape’, a high-level conference in Jakarta on February 27, bringing together renowned policymakers and thinkers.

Indonesia will also have the opportunity to continue showcasing the country’s digital transformation as it will host the upcoming 2018 IMF-World Bank Annual Meetings.

Email: elisa.valenta@theinsiderstories.com