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Indonesia will inevitably face a new global landscape within
20 years, where people, goods, services and capital will be able to
move more freely across borders, a Bank Indonesia discussion was told
Tuesday.
In response, the government needed to start preparing now by promoting
an approach that allowed policies to be adapted quickly, instead of
setting rigid quantitative targets.
The discussion, Bank Indonesia's first twice-monthly roundtable forum
of the year, took as its theme "A critical view on the national
long-term development plan 2005-2025."
State Minister for National Development Planning Paskah Suzetta said
that the country's current long-term development plan was divided into
four medium-term plans (RPJM), and had the overall target of achieving
an independent, developed, just and prosperous Indonesian society by
2025.
Also speaking during the discussion, economist Djisman Simandjuntak
said that adaptable planning was essential, rather than focusing
exclusively on rigid quantitative targets.
Djisman, who also chairs the board of directors of the Centre for
Strategic and International Studies (CSIS), referred to a number of
important changes that were expected to take place in the next 20
years. He said the world would see a new geographical landscape emerge,
with China, India and ASEAN becoming new global centers.
"Within 20 years, we will see massive erosion of the 400-year-old
Westphalia system, where a nation's sovereignty was paramount beyond
everything else, and where foreign nations could not meddle in another
country's domestic affairs. In the future, this will change
dramatically."
Djisman also mentioned the possibility of ASEAN becoming a single
market, with a strong chance of adopting a single currency, not only to
be used by ASEAN members but also by Japan, with which most ASEAN
members had strong trade relations.
"In such an uncertain future, planning can only be indicative in
nature. Therefore, it is better to have a planning policy that can
accommodate change," he stressed.
He also urged Indonesia to prioritize the development of its human
resources.
"According to UNESCO world education indicators, Indonesia is the
lowest in terms of fostering human capital, with government spending on
education only 1.9 percent of GDP, while the figure for Malaysia is 8.1
percent, South Korea 7.1 percent and Thailand 4.6 percent," he said.
Meanwhile, Indonesian Employers Association (Apindo) chairman Sofjan
Wanandi said that the country was already having problems formulating
sufficiently responsive policies to ever-changing global economic
challenges.
Sofjan said that despite the cuts in BI's key interest rate, which has
been trimmed 10 times since May to 9 percent, with the most recent cut
being on Tuesday, this had failed to boost the growth of the real
sector.
"The monetary situation is improving, but investment growth is
decreasing. Clearly there is something wrong. Most businesspeople are
in a `wait and see' mode, and don't want to fall victim to the risks
imposed by instability," he said.
In response, BI senior deputy governor Miranda S. Goeltom said that all
five of BI's roundtable discussions this year would focus on
real-sector issues.
"The competitiveness of Indonesian products is decreasing. Despite
improvements in the macroeconomic indicators, the real sector is
worsening and prone to external shocks, such as increases in fuel
prices ... we need to reflect and prepare a strategy to fast-track
development."
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