Government and Public Services

Given that it is one of the world’s most populous nations with a fast-emerging middle class, PwC expects Indonesia to be among the world’s top five economies by 2050. However, the Indonesian government still needs to overcome many complex challenges on the road to developing an advanced economy.

The President's Priorities

President Jokowi’s inauguration speech in 2019 identified five priority areas for advancing Indonesia’s economy over the next five years, including: the development of human resources; continuing the construction of infrastructure; the creation of omnibus laws and related regulations; a simplification of bureaucracy; and economic transformation. Following the COVID-19 crisis, economic growth and recovery will clearly be an important area of focus for the government over the short to medium term. However, a number of the government’s other priorities will not only support the recovery following the crisis, but also seek to stimulate the longer-term development of the economy, as discussed below:

Infrastructure Development

Addressing Indonesia’s infrastructure deficit remains a key priority of the Jokowi administration, since this is necessary to support the economic transformation of the country. Infrastructure development will improve the connectivity between production and distribution areas, facilitate access to tourist areas, boost employment and accelerate the added value of the people's economy. In line with this priority, improving the policy, planning and delivery of infrastructure represents a central focus of PwC’s Government and Public Service (‘G&PS’) offering. This offering is led by the Capital Projects & Infrastructure (‘CP&I’) team within Advisory Deals Services, but draws upon the infrastructure skills and experiences of other lines of service, including legal, assurance, and tax. As such, the PwC Indonesia infrastructure team brings together functional and industry expertise in order to help clients solve complex issues relating to infrastructure investment and development.

Human Capital Strengthening/Enhancement

Indonesia has been predicted to experience a demographic bonus from 2020 to 2035, as a result of its robust economic growth, with the working age population being expected to account for 70 percent of the total population by 2030. President Jokowi has stressed that the development of human resources is the key to achieving this by 2045. The process starts with the provision of a good healthcare system for babies and infants, and continues with the provision of education that will prepare future generations of Indonesians so that they will be able to compete globally. PwC Indonesia has a highly qualified local team that supports our clients in building the right capabilities for making Indonesia more globally competitive.

Investment Facilitation

Indonesia is a country with a complex regulatory environment. There has always been a gap between the volume of investment commitments and the volume of investment actually realised. President Jokowi emphasised the importance of cutting barriers to investment and he has set policies to encourage investment as one of his goals for his second term administration.

It does not matter what business you are engaged in, what phase of business you are in, nor whether you intend to enter the Indonesian market by establishing a new entity, or by means of a merger or acquisition: with our extensive knowledge, expertise and experience, we will be ready to assist you in navigating the various regulatory and compliance requirements. By assisting our clients to minimise or remove obstructions during the course of the investment process, PwC Indonesia supports them to achieve their goals efficiently.

Simplifying Bureaucracy

Government institutions are a key requirement if the Government is to ensure that the Indonesian people receive the greatest benefit from economic development, as a result of accountable and well-managed allocation of resources. In June 2019, Indonesia had more than 4.2 million government officers to serve a nation of approximately 269 million citizens, who are spread over 17,504 islands. The Jokowi administration’s plan for 2019–2024 emphasises the importance of bureaucracy reform in order to eliminate ineffective and inefficient processes, improve public services and avoid duplicating permits. Government institutions need to ensure that the programmes are delivered effectively, and that they bring maximum benefits to the people.

PwC has great experience of government institutional reform, from many parts of our global network, which enables us to act as a one-stop source of assistance for transforming bureaucratic institutions, so that they become simpler and more agile but still remain accountable in terms of performing their public service mandates. We solve important problems in order to make institutions more adaptive, productive, digitally-enabled and innovative. One of the most practical solutions for simplifying bureaucracy is to implement e-government systems, which enable citizens to receive more personalised responses much faster, improving accessibility and efficiency. Other benefits of implementing proper e-government systems include cost savings, the removal of autonomous processes by means of automation, and the addition of new capabilities that allow government officers to provide a wider range of services to citizens.

Effective Government Spending

The Jokowi administration’s plan for 2019–2024 is focused on ensuring that all government programmes are properly executed, delivered and realised. The administration has emphasised that it will enforce a bureaucracy that delivers, guaranteeing that the general public will truly experience the benefits of the implemented programmes. In addition, any laws that are deemed to be obstructive will be simplified, to further boost job creation and empower small to medium enterprises.

A New Capital City

President Jokowi has announced that the national capital will move from Jakarta to the province of East Kalimantan, on Borneo. The government has conducted in-depth studies over the past three years, and as a result of those studies the new capital will be built in part of the North Penajam Paser regency and part of the Kutai Kertanegara regency.

The new capital city project is currently the most ambitious infrastructure project in Indonesia. Careful planning and preparation is necessary to be able to respond to the challenges accompanying the realisation of President Jokowi’s big vision. The government is keen to learn from the experiences of similar projects in other countries and apply internationally recognised best practices in order to mitigate the various risks that might arise. PwC Indonesia, through its global network, has extensive experience of implementing infrastructure and urban planning and is committed to supporting the Government in realising a modern new capital. This city will be a driver of the government’s reform agenda and set the standard for all aspects of national and local government service delivery, from which other cities and provinces can learn.

How We Can Help

Our Government & Public Services practice provides a range of professional services to all levels of government in Indonesia, including provincial and regional governments, national ministries and state-owned enterprises. We also service several international development organisations, by supporting their work with the Indonesian government, including multilateral and bilateral funding agencies and NGOs.

We work together with our clients, looking for practical, workable and innovative solutions that make a difference when solving the pressing challenges that are being faced every day, across a range of areas in the public domain, including infrastructure, investment, healthcare, public finance and economic development.

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