GLOOMY ECONOMY NEEDS IMMEDIATE SOLUTIONS

By Andi Abdussalam

Jakarta, June 29 (Antara) - The economic downturns that Indonesia is facing now need immediate solutions in order to prevent the recurrence of economic crisis that hit Indonesia in 1998.          Indonesia also needs to shift its orientation in economic development from reliance on commodity and raw materials to improving infrastructure and developing industries.          After all, economic slowdown is still expected to continue in the future because of inadequate infrastructure to support economic activities.          Thus, the economy will continue to be under pressure, and a slowdown will still continue to occur in the future. "It is forecast that there will be low economic growth for some time in the future which is why the government has set a lower economic growth target in 2016," Chief Economic Minister Sofyan Djalil noted on Tuesday last week.          He said the government has set a lower economic growth target of 5.5-6 percent in 2016. The target is set at a lower level, as it is predicted that the world economy in 2016 will continue to face pressures.             Seeing the economic slowdown prospect, Director of the Madani Nusantara Institute Prof. Nanat Fatah Nasir stressed the importance of swift solutions.           "The economic condition is increasingly weakening. If no immediate solution is found, it could lead to a serious economic crisis similar to the one that occurred in 1998," Natsir said on Monday.          The same call for immediate solution was also made by the Indonesian Chamber of Commerce and Industry (Kadin). It  urged the government to implement strategic steps to address the issue of the sluggish economy.          According to Kadin, national and regional businessmen, who are the engine of the national economy, are facing also several obstacles in running their enterprises.          "The downfall of businessmen will make it difficult for the country to boost its economy. All these factors are results of improper policies issued by the central and regional governments as well as the monetary authority," Deputy Chairman for Regional/Logistics Board Empowerment of Kadin Natsir Mansyur said in a press statement released on Wednesday.          The World Bank noted that developing countries, including Indonesia, are facing a number of challenges, such as low prices of commodities and the world price of oil.          The World Bank also reported the hike of interest rate in the United States, which will tighten funding in developing countries.          "In view of that, I hope commodity price hikes. They will certainly not decline continuously. Now price is always high, but they must drop sometimes," Vice President Jusuf Kalla said meanwhile.          Besides that, according to Kadin, Indonesia's economy has been weakening due to continued dependence on the country's commodities.          "The Indonesian economy, which recorded growth over the last 10 years, is now weakening because we have been 'trapped' by benefits from commodities for a long time and have forgotten how to develop industries and infrastructure," Deputy Chairman of Banking and Financial Affairs of Kadin Rosan P. Roeslani stated.          Speaking at a coordination meeting with the Kadin office of East Nusa Tenggara in Kupang on Sunday, Roeslani had pointed out that dependence on prices of commodities will not support economic stability as they largely depended on the market and international demand.          This means that self-reliance cannot be established in the future and for the economic stability of the nation.          "The issues we are facing currently should encourage us to review them to ensure economic development. We should realize our infrastructural and industrial development projects soon and not believe that it is too late to begin," Roeslani remarked.          Therefore, Indonesia should realize its infrastructural and industrial development plans soon to revitalize the country's economic development, he emphasized, adding that infrastructure and industries were the primary instruments of growth of both national and regional economies.          Investment in the infrastructure projects should also be boosted.          Minister Sofyan Djalil said the acceleration in the realization of investment in the coming five years is expected to help boost the country's economic development.          "If we can realize the investment target of Rp5.6 thousand trillion in the coming five years, it will create relatively high economic growth," the coordinating minister for economic affairs remarked.          Djalil said the government was optimistic that the economic growth in the coming years would be supported by government projects, the private sector, and national investment.          Therefore, the government is taking steps to boost economic growth through the development of infrastructure and investment to support the industries in various regions across the country, the minister stated.          "Though, we still hope that the economy will improve, the development of infrastructure will move speedily, and the economy will grow faster," he noted.          Vice President Jusuf Kalla also said that Indonesia will expedite infrastructural development to boost economic growth.          "There are a lot of things to do, including expediting infrastructural development, to improve our economy," he stated in response to the World Bank's projection of economic growth in developing countries.          In its report, the World Bank revealed that developing countries are projected to grow 4.4 percent in 2015. This estimation is lower than the GDP growth in January 2015, which was recorded at 4.8 percent.          Kalla hopes that the average growth of the Indonesian economy is higher than 4.4 percent.          The infrastructural development being carried out in the country is expected to increase long-term economic growth, he pointed out.          "We will build roads, ports and other facilities. They will not be ready immediately but within the next two to three years," he affirmed.          According to Minister Sofyan Djalil, infrastructure projects such as the development of roads and power plants are vital requirements as they are related to the arrival of investors in Indonesia and the creation of job opportunities, he explained.          Therefore, the government has eased licensing and reduced regulations that have, so far, hindered investment.          "Flexibility is needed to overcome economic slowdown. Policies should not be too rigid and administrative violations must not be considered crimes. If they are, no one will make any initiative," the minister said.***3*** (T.A014/b003/B003)