Finance Minister Optimistic About Growth Target

8/31/2012

 

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Finance Minister Agus Martowardojo said he was optimistic that Indonesia would achieve its economic growth target of 6.8 percent in 2013.  
 
“The government is still confident the target could be achieved, even though many said it was too high,” Agus said after attending a plenary session of the House of Representatives on the draft state budget for 2013 on Wednesday.  
 
He said that in order to achieve the target, the government would accelerate the implementation of the government projects. 
 
The administration will encourage the participation of both state companies and the private sector in the execution of projects under the Master plan for Acceleration and Expansion of the Indonesian Economic Development (MP3EI), he said.  
 
The government also will improve the investment climate, build infrastructure, facilitate the development of downstream industries, offer incentives for businesses and increase the maximum limit of income exempted from tax to Rp 24 million per year, he added.  
 
Agus said he could understand why some factions in the House of Representatives doubted that the target could be achieved. 
 
The minority Gerindra faction, whose spokesman is Fary Djemi Francis, is among the groups describing the economic growth target as unrealistic.  
 
“The growth target is too high amid global economic uncertainties. The Chinese economic slowdown will have an impact on Indonesia. It is impossible that the country’s economy could grow 6.8 percent,” Fary said.  
 
He also criticized the government for showing more concern with recording a high economic growth rate than eliminating poverty.  
 
Said Abdullah, of the PDIP faction, a major opposition party, said the target was too optimistic and is contrary to the prevailing condition of the world economy. 
 
“China and India are on the decline, adding to the problem of global economic uncertainties,” Abdullah said.  
 
With poor infrastructure, it would be difficult to boost investment and drive growth, he said.  
 
“The infrastructure sector could not yet be expected to provide adequate support for economic development. Ports and roads and other facilities are vital factors in attracting investment,” Abdullah added.  
 
Ecky Awal Muharam, of the Islamic based Justice and Welfare Party (PKS), claimed the target is realistic, provided that the government could boost the consumer sector to offset a decline in exports.  
 
“However, economic growth cannot be based solely on consumption. Consumption-driven growth can be relied on only for the short term,” he said, adding that growth prompted by consumption is not quality growth. 
 
Antara
 
Source: Jakarta Globe, August 30, 2012