JOKOWI ADMINISTRATION OPTIMISTIC ABOUT INDONESIA'S ECONOMY by Fardah

Jakarta, Sept 12, 2015(Antara)- Amid the global economic slowdown, President Koko Widodo (Jokowi) has emphasized the importance of having a common vision regarding the country¿s economic policies and their implementation.

        Jokowi explained that the economic slowdown in Indonesia has been caused by the Greek crisis that occurred a few months ago, the hike in the United States' interest rates, and the depreciation of the yuan in China, coupled with escalating tensions between South and North Korea.

        The president, however, believed that Indonesia's economy is now much better than in 1998 or 2008, when economic crises hit many countries, including Indonesia.

        Indonesia's foreign exchange reserves are now recorded at US$107 billion. "This is adequate to pay for 7.5 months of imports", he noted.

        Additionally, its foreign debt ratio had fallen to 34 percent, far below the 120 percent recorded in 1998 that led to a monetary crisis.    
   "Our economic condition right now, as compared to 1998 or 2008, based on figures I received, is said to be better," he stated at a plenary cabinet meeting at his office in early September.

        Jokowi said all instruments available to the government have been used to cope with the economic slowdown.

        The president said maintaining optimism and confidence is important among the people, as the problem is caused by external factors.

        Jokowi also reiterated that it is time for Indonesia to change from being a consumptive to a productive economy.

        He stated that development must be started in the peripheries-- the villages and regions -- by improving their human resources and capitalizing on scientific knowledge with a creative and innovative mindset, coupled with firm determination.

        "We must reduce dependency on income from natural resources and must control the budget deficit and debt ratio to remain in a safe range," he pointed out.

        To boost its economy further, Indonesia also needs to immediately deregulate regulations that have hindered business and investment, despite the fact that on-field data revealed positive developments in the country's economy.

        "We are racing against time, although data such as the capital adequacy ratio at Indonesia's banks is still above 20 percent," he emphasized.

     On Sept. 9 Jokowi announced a new economic policy package aimed at overcoming Indonesia's economic slowdown.

        "Let us unite to face the challenges of the global economic slowdown. The government will implement the commitment seriously. I will lead the working cabinet directly to make a breakthrough," the President stated.

         There are 89 regulations to be revised as part of the efforts to strengthen economic coherence, to prune irrelevant regulations and to increase the competitiveness of the nation¿s industries.

         President Widodo also expressed his commitment to completely deregulating all economic packages in September and October 2015.

         "So there will be a first, a second and a third package announced," the President said.

         The government has also simplified the issuance of permits, improved procedures for licensing, strengthened synergies, and used electronic-based services.

        In addition, the government will boost development of low-cost housing and facilitate greater investment in the property sector.

        Earlier, Economic Coordinating Minister Darmin Nasution said the sector which needed improvement and had caused concern was the national industrial sector.

        "Lots of regulations have slowed down the sector, but it will be improved, especially the industrial sector," the minister said, adding that the food industry also needed to be considerably regulated.

        "There are many food policies that should be regulated. The one food sector policy that needs to be overhauled is the one governing the sale of meat," Nasution said.

        He also elaborated on the economic package made up of fiscal and financing, deregulations concerning investment in industry and trade fields, incentives for speeding smelter construction, and food handling issues.

            The policy package concerning fiscal and finance will comprise some six to seven points, among other things about property ownership by foreigners, and on debt to equity ratios.

            The policy package on deregulation will emphasize the need to review or simplify regulations or laws considered as barriers to investment for industry and trade.

            "Some regulations will be revised partly and others totally. These will involve some 160 regulations, if I am not mistaken," he said.

            On food issues, the government plans to provide rice for the poor for two additional months, in September and November, or December, during low yields of paddy harvests.

         In the meantime, Finance Minister Bambang Brodjonegoro has given his assurance that the government will always respond to actual developments related to the economic growth assumption set in the draft 2016 state budget.

        "The government will always respond to actual economic developments and accommodate various inputs during deliberations (on the draft 2016 state budget) with the DPR (House of Representatives)," he said at a plenary meeting of the DPR recently.

         The government has set the economic growth target at 5.5 percent in the draft 2016 state budget. The target is in the lower limit of the economic growth range of 5.5 to 6.0 percent, as agreed upon during earlier deliberations.

          Brodjonegoro added that 2016's economic growth would continue to be fueled by domestic demands, including strong household consumption and a significant increase in investment through infrastructure spending in the agricultural, maritime and industrial sectors.

             He noted that the current condition of the Indonesian economy remains under control, with all macro indicators showing no signs of crisis.

            "Our economy recorded a positive growth of 4.7 percent in the first semester. The trade balance has shown a surplus, and the current account deficit has gone down. So, the macro conditions are still good. Furthermore, in the banking industry, NPL (non-performing loans) and CAR (capital adequacy ratio) are sound. The condition is totally different from that in 1998," he pointed out. ***3***
(f001/INE/o001)
       
 12-09-2015 14:01:32