JAKARTA (REUTERS) - Indonesian President Joko Widodo on Thursday (Nov 28) ordered government agencies to remove two ranks of public servants in 2020 and replace their roles with artificial intelligence, in a bid to cut red tape hampering investment.

He made the remarks in a room full of leaders of big companies as he laid out a second-term agenda aimed at changing the structure of South-east Asia's largest economy by reducing its reliance on natural resources.

The President, whose new five-year term began last month after winning an election in April, said Indonesia should transition to higher-end manufacturing, such as electric vehicles and use raw materials like coal and bauxite in such industries, not just exports.

Such transformation would require foreign investment and Mr Joko said he would improve the business climate by fixing dozens of overlapping rules and cutting red tape.

To reduce bureaucracy, he said the current top four tiers in government agencies would be flattened to two next year.

"I have ordered my minister (of administrative and bureaucratic reform) to replace them with AI. Our bureaucracy will be faster with AI," he said, referring to artificial intelligence. However, he added this plan would need parliamentary approval.

Mr Joko did not provide further details, including any guidance on which specific roles would be removed or how the technology would be used.

The government will hand over to Parliament a Bill on tax reforms next month and another Bill addressing labour issues, Mr Joko said, a timeline Finance Minister Sri Mulyani Indrawati made public on Wednesday.

Political parties in Mr Joko's ruling coalition control 74 per cent of the seats in Parliament, making it easy for his administration to push through legislation.

Mr Joko reiterated the government's outlook that Indonesia's economy would grow 5.04 per cent-5.05 per cent this year, slower than its 5.3 per cent target, amid a global economic slowdown.