|
Indonesia would be able to achieve higher growth if it
jettisoned its complacent mentality and worked instead on mustering its
key economic strengths, Vice President Jusuf Kalla said Thursday.
"Indonesia's economic strengths actually arise from weaknesses in other
countries," Kalla said during a seminar on the economy organized by
Citibank Indonesia.
"And what are those strengths? It's in the growing global need for
limited supplies of energy, commodities and minerals, when we have all
of these in abundance. Not every country in the world has these
advantages."
Using these advantages, Kalla said Indonesia should set more optimistic
growth targets -- of 6.3 percent this year, 7 percent next year and 8
percent by 2009 -- as it worked to overcome the constraints posed by
poor infrastructure and other factors that undermined competitiveness
"It's time we gave up the habit of basing our growth forecasts on oil
prices, on persistent problems here and there, on this and that," he
said. "We should now decide first what we want, and then work hard to
reach it, come what may."
Kalla admitted that Indonesia's economy would still be influenced by
global trends, but said its large reserves of natural resources, such
as oil, gas, coal, crude palm oil (CPO), rubber and mineral ores,
should ensure the economy's overall sustainability.
"We used to worry every time oil prices rose. We recently had problems
with cooking oil. But we can now quickly address these problems and
compensate for any shocks that result from higher commodity export
prices," he said.
Indonesia's economy grew by 5.5 percent last year, slightly less than
2005's 5.6 percent.
Recent developments in the oil and gas sector are expected to restore
Indonesia as a net energy exporter, Kalla said, while being one of the
biggest CPO exporters should benefit the country given the recent
global trend toward biofuel and green economics.
Kalla further said Indonesia should not repeat the mistakes of the
past, when it sold its commodities in unprocessed form at low prices.
"We want quality growth. That's why we now always ask that exports of
our commodities be accompanied by investment to add more value to
them," he said.
Also speaking during the seminar, economist Chatib Basri of the
University of Indonesia said that higher growth could be attained if
Indonesia managed to incorporate its "hidden economy" of informal small
and medium enterprises (SMEs) into the mainstream economy.
"The output of these businesses could account for as much as 30 percent
of GDP, and it is these businesses that actually prevented most of the
economy from collapsing after the financial crisis," he said.
"It is important that these SMEs are supported so that they can grow.
This can be done by making them more bankable and simplifying business
permits."
On the country's recent macroeconomic stability, Citibank chief
economist Anton Gunawan warned of the danger of the central bank's key
rate falling too low, which could backfire on the rupiah.
He forecast that economic growth would be 6 percent this year and 6.5
percent next year, while the inflation rate would be 6.6 percent and
6.4 percent, respectively.
|
