Fri, 22 May 2009
Indonesian President Susilo Bambang Yudhoyono outlined yesterday his domestic agenda for the next five years, predicting that if re-elected later this year Indonesia would record 7 per cent annual economic growth by 2014.

Analysts are paying close attention to Mr Yudhoyono’s forecasts because he is widely expected to defeat his two rivals, Megawati Sukarnoputri – his predecessor, and Jusuf Kalla – his deputy in presidential elections in July.

Current polls suggest Mr Yudhoyono, whose Democrat Party won the most votes in April’s parliamentary election, will win comfortably in one round but experts believe his lead will narrow once the formal campaign begins next week.

Indonesia last experienced 7 per cent economic growth in 1996, during the era of the dictator Suharto and before the 1997/98 Asian financial crisis. Growth last year was 6.1 per cent and 4.4 per cent in the first quarter of this year. Analyst forecasts for 2009 range fromaround 2 per cent to 4.5 per cent.

Mr Yudhoyono said yesterday growth would be achieved by improving infrastructure and the business climate, and reforming the bureaucracy and the legal system. Economic policies will be “pro-growth, pro-jobs and pro-poor” and emphasise “fair trade not free trade”.

He declined to give specifics of how these policies would be enacted.

If no one wins a majority in the election on July 8, the top two candidates will compete in a run-off two months later.

Mr Yudhoyono said this year and next would be years of recovering from the global crisis before more rapid growth would kick in.

Better management of Indonesia’s extensive natural resources, particularly coal, oil, gas and palm oil, would also be key to maintaining sustainable growth, the president said.

Fauzi Ichsan, of Standard Chartered Bank, said the president’s forecast was “realistic but would require a lot of work to achieve”.

“The number one priority will be infrastructure development, toll roads, power stations, harbours and railways,” he said. “On top of that he will need to do something about the legal uncertainty and reforming the labour law if he’s going to stimulate investment.”

Mr Yudhoyono presented his vision in an interactive meeting with the Indonesian Chamber of Commerce. When Mr Kalla attended a similar gathering on Monday he predicted 8 per cent economic growth by 2011 and banged the populist nationalist drum hard.

Mrs Megawati, whom Mr Yudhoyono defeated in 2004, is due to present her policies on Friday.

Mr Yudhoyono said that apart from the growth target he was not going to make many promises during the campaign because of the global economic uncertainty.

Two issues he did not address during the meeting were the fight against corruption and Islamic terrorism. These were two of the hottest issues in the 2004 election and their omission shows Mr Yudhoyono’s success in these areas over the last five years.



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