Welcome Guest   |  Login   |   Signup
JG Logo
Fri, February 10, 2012
Archive Search

Businesses Laud Plan To Raise GDP Goal
Muhamad Al Azhari & Dion Bisara | August 25, 2009

Share This Page
0
0
0
0
Share with google+ :


Post a comment
Please login to post comment

Comments

Be the first to write your opinion!

The business community on Tuesday welcomed an initial agreement between the government and the House of Representatives to raise the economic growth target in next year’s draft budget to 5.5 percent from 5 percent, but urged the government to speed up infrastructure spending.

Legislators from House Commission XI, which oversees financial and budgetary matters, persuaded a reluctant Finance Minister Sri Mulyani Indrawati on Monday night to raise the target, saying it would send a message of confidence to businesses and investors.

The revision, however, is still subject to approval from the House’s budgetary commission and a full plenary meeting.

“Generally, we welcome the revision,” Sofjan Wanandi, the chairman of Indonesian Employers Association (Apindo), told the Jakarta Globe on Tuesday.

“It makes sense considering Indonesia’s potential for economic growth. However, to achieve that growth the government will have to work hard to speed up infrastructure spending,”

He added that the government must fix the “messy” budget-disbursement process between the central and local governments, and between the national ministries and their regional offices.

“Investment from the private sector will surely follow if the government shows strong initiative on infrastructure spending,” Sofjan said.

The commission also gave the government the green light to expand the budget deficit target to 2 percent from 1.6 percent in the draft budget if the money were to be spent on infrastructure.

Sri Mulyani was initially reluctant to set a higher growth target, saying 5 percent was enough to reassure international investors. She also questioned whether it was wise to raise the target while the global economy remained fragile.

“Plenty of skeptical views [from international agencies] over the extent of the global economic recovery remain, and our exports are unlikely to be that strong next year,” she said.

Sri Mulyani said next year’s growth would largely remain driven by consumption. She doubted investment growth would meet the 8.5 percent target in the 2010 draft budget because of basic structural problems, including barriers to land acquisition and complicated licensing procedures.