RI'S ECONOMIC PROSPECT CAN BE BETTER IN 2010

by Andi Abdussalam


Jakarta, Aug 4 (ANTARA) - In line with the world economic recovery, development of the real sector and the potential domestic market, Indonesia's economic prospect can be better next year provided that the government is able to implement realistic and effective programs, observers say.

        "If the government is able to implement its economic policies as outlined by President Susilo Bambang Yudhoyono in his state-of-the nation address on Monday, I believe Indonesia's economic prospect would be better next year," legislator Nasir Djamil said.

        President Yudhoyono, who won last month's presidential race for a second five-year term, outlined his government's development priorities next year before an extraordinary plenary session of the House of Representatives on Monday.

        The president prepared seven priorities his government would implement to boost economic growth. Two of the seven priorities, namely fiscal incentives for the development of the real sector and worker layoff prevention, will generate Indonesia's economic development amid the impact of the global economic crisis.

        The real sector will be constantly carried out, following the issuance of various policies including fiscal incentives to encourage the real sector to grow faster. In the meantime, the government will also prevent dismissals while constantly lowering the unemployment rate.

        In facing the current crisis Indonesia is also preventing unjustifiable and unfair dismissals. Under various programs of minimizing the impact of the global financial crisis and maintaining the growth of unemployed people at less than 60,000, far less than the originally estimated 1.5 million.

        Besides the government will also maintain price stability, promote the purchasing power of the people, protect the poor or near poor people, maintain food and energy security and continue with its subsidized rice program for 17.5 million targeted households with 15 kg per home for 12 months.

        "If the government really implements this, the Indonesian economic growth will continue to be boosted even if the global financial crisis has not ended ," Nasir Djamil said.

        The government itself has set a five percent economic growth target as unveiled by President Yudhoyono in his address on Monday.

        However, observer said the target was too conservative while actually it was possible for Indonesia to set its economic target at between 5.5 percent and 6 percent.

        "It is too conservative. The government should set it at 5.5 percent. A five percent is too easy for the government to achieve even if there is economic crisis," chief economist of state-owned bank BNI, Tony A Prasetyantono said.

        He said domestic market alone would be able to contribute 3.5 percent to the economic growth. "So, the five percent target is less challenging. It will provide us with less motivation to work hard," he said.

        The same opinion was also voiced by the Indonesian Chamber of Commerce and Industry (Kadin), saying the government's national economic growth target of 5 percent should be increased to 6 percent.

        With the 5-percent economic growth target mentioned by President Susilo Bambang Yudhoyono Kadin chairman MS Hidayat said, it would be difficult to improve the real sector. "Five percent is less effective. It should be six percent," Hidayat said.

        Hidayat said if the domestic real sector grew well and was balanced with bureaucratic improvements, economic growth in 2010 could be stepped up to six percent.

        "I think, the draft 2010 state budget is less expansive in the eyes of business makers," the Kadin chairman said, adding that the five percent economic growth set by the government was ineffective.

        Therefore, according to another Kadin official, the five-percent growth set by the government for next year only reflected the government's low confidence in its ability to improve its performance in the three sectors.

        "Imagine, when our economy grew an average of above six percent before the crisis, the economy remained unable to address the unemployment and poverty problems because it could not create more jobs," he said.

        "The more so, if growth is set at only five percent for 2010 you can imagine what it can do in 2010," the head of Kadin's standing committee for domestic trade, Bambang Susatyo said.

        He said said quality economic growth was determined by three factors, namely investment, exports and consumption.

        "If the three engines of growth work effectively the quality of economic growth will be good, meaning it solves problems," Bambang Susatyo, said commenting on President Susilo Bambang Yudhoyono's speech on Monday.

        President Yudhoyono in his speech when presenting the bill of the 2010 State Budget to the House of Representatives on Monday expressed optimism that the economy could grow five percent or more in 2010 and even higher in the years to come.

        "If growth in 2009 could be maintained at 4.0-4.5 percent it would be a potential in itself," he said. He said despite the global crisis, Indonesia must continue maintaining its national growth at a relatively high or at least at between 4.0 and 4.5 percent. If the target is reached it would be quite an achievement in the midst of the current global crisis.

        Therefore, according to Nasir Djamil, the involvement of all components of the nation, that of the private businesses in particular, is needed to make the government's economic policies a success.***2*** (T.A014/A/H-NG/A/O001) (T.A014/A/A014/A/O001) 04-08-2009 10:15:38