OBSERVERS DOUBT PRESIDENTIAL CANDIDATES' PROMISES

By Andi Abdussalam

Jakarta, June 24 (ANTARA) - Economic observers and analysts have expressed doubts over promises made by presidential candidates who are campaigning for the upcoming presidential polls, saying that their high economic targets are unrealistic while what they have to focus on is how to improve the quality, not how to boost the figure, of the country's economic growth.

        Three presidential pairs contesting next July 8 presidential race are now trying to win voters' support by explaining to them their visions and missions, including their targets to increase the country's economic growth.

        The three presidential and vice presidential candidate pairs are the SBY-Boediono (the incumbent president Susilo Bambang Yudhoyono of the Democratic Party and his running mate Bodiono), JK-WIN (Jusuf Kalla of the Golkar Party and Wiranto of the People's Conscience Party or Hanura) and Mega-Pro, which is a combination of Megawati Soekarnoputri of the Indonesian Democratic Party of Struggle (PDIP) and Prabowo Subianto of the Greater Indonesia Movement Party (Gerindra).

        In their attempts to boost the country's economic growth in the coming five years, the Mega-Pro pair promised a 10 percent growth (or two digits), JK-WIN 8 percent and SBY-Boediono 7 percent.

        "The economic growth targets set by presidential candidates for the next five years are too high," economic observer Dr Fredrick Benu of the Nusa Cendana University said.

        In the coming five years the country's economic growth will increase if there is no economic turmoil. Yet it would still be impossible to reach over six percent, not to mention a two-digit figure, he said. Although macro economic indicators are relatively conducive, the average economic growth in the next five years will not exceed six percent.

        "I think there is nothing unusual in their programs. Their programs even tend to be monotonous. What appears to be different is the way they communicate with the public," he said.

        After all, the country's economic growth would be determined not only by domestic policies but also by the global economic conditions, he added.

        In the current global financial crisis it would therefore be very difficult for the country to reach an economic growth as set by presidential candidates.

        "That is actually not more than a political target set to exert a psychological influence on their constituents," Thomas Ola Langoday of the Kupang-based Mandira Widya University (UNIKA), said meanwhile.

        According to economic observer Revrisond Baswir, leaders should not only talk about economic growth figures, but also on the quality of the growth. "Talking about economic growth figures only serves the interest of those with capital, not of the people in general," Baswir said. For many people the quality of economic growth is far better than high or low figure.

        But whether or not the presidential candidates' targets were realistic, the economic observer said that it would depend on the country's economic conditions and sources of revenues. "Whether or not it is realistic would depend on their strategy. The quality of growth could be judged from the financing sources and benefit obtained from the economic growth," he said.

        Moreover, with the present world economic condition and tight bank credits at home, a high economic growth would be unlikely to achieve.

        According to Ismed Hasan, chairman of the Professional Civic Society Group, if banks' intermediary roles are not running well, the economy will also face difficulties to grow.

        Credits which are needed to generate the economy are small as a result of high interest rates. "The market becomes gloomy and the people's purchasing power becomes weak," Ismed Hasan Putro said on Wednesday.

        The government's economic target this year at 4.5 percent could be achieved if banks credits are running well. However, if the banks' credit performance remains as it is today, the economic growth target will be difficult to achieve, he said.

        Now banks' credit extension is not running well because lending rates are high, namely reaching 16 percent while the fair rate for businesses and other customers is 12 percent.

        Putro believed that the high lending rates at present could not be separated from politics because while the country is facing legislative and presidential elections, there was fear that liquidity at banks would run short.

        If there are lots of money at banks, the government would have the courage to cut lending rates and extend credits as soon as possible. If lending rates are lowered, businesses and other creditors would compete in borrowing money and this would generate the opening of new projects and the development of the real sector which in turn would offer high job opportunities.

        But, it seems, the direction of Indonesia's economic growth in the current global financial crisis is not yet clear.

        "So, presidential candidates' promises to boost economic growth to a high level are doubtful targets," Putro said. ***1*** (T.A014/A/HAJM/21:30/H-YH) (T.A014/A/A014/A/H-YH) 24-06-2009 22:07:27