Further deregulation needed: ADB<\/p>\n
SINGAPORE (Reuter): Indonesia's economy is likely to stabilize
\nin the next two years but the longer-term prospects hinge on the
\nprogress of market deregulation needed to sharpen competitiveness
\nand fuel future growth, the Asian Development Bank (ADB) said
\nyesterday.<\/p>\n
\"The pace of real sector deregulation has clearly flagged
\nsince the early 1990s; it needs to regain momentum to contribute
\nto Indonesia's competitiveness and future growth,\" the ADB said
\nin its latest annual outlook.<\/p>\n
The bank put Indonesia's gross domestic product (GDP) growth
\nat 7.1 percent in both 1995 and 1996 against 7.4 percent in 1994
\n(Indonesia's Central Bureau of Statistics places this figure at
\n7.34 percent).<\/p>\n
The bank said agricultural output is forecast to improve
\nsubstantially from its poor performance in the recent past with
\ngrowth of 4.3 percent in both 1995 and 1996.<\/p>\n
Rice production is expected to benefit from changes in the
\nprice incentive structure and from the introduction of new rice
\nvarieties that are more resistant to drought, it said.<\/p>\n
But overall industrial growth over the next two years is
\nforecast to be lower than the high rate achieved in 1994, and
\nmanufacturing growth is projected to be somewhat lower than in
\n1994 on the back of more competitive conditions.<\/p>\n
The ADB said Indonesia's industrial growth was 7.3 percent in
\n1993 and 10.7 percent in 1994, and forecast rates of 7.2 percent
\nin 1995 and 7.0 percent in 1996.<\/p>\n
\"Manufacturing also showed continued vigor with a growth rate
\nof 11 percent (in 1994), higher than in 1993,\" the bank said.<\/p>\n
Inflation<\/p>\n
The ADB also noted some less satisfactory developments. These
\ninclude persistent inflation and growing off-budget public
\nexpenditure which undermine fiscal discipline and transparency in
\nthe allocation of public resources.<\/p>\n
Indonesia's inflation rate was 9.2 percent in 1994, the bank
\nsaid. It projected inflation of 7.8 percent in 1995 and 7.6
\npercent in 1996.<\/p>\n
The rising price of cement and scarcity of supply underlined
\nthe need for further improvements in domestic competitive
\npolicies affecting incentives, the bank said.<\/p>\n
It said although rapid progress had been made in the wide-
\nranging banking and financial sectors, trade and industrial
\npolicy reforms have not been commensurate.<\/p>\n
\"In fact, some recent increases in trade protection,
\nexemplified by the imposition of export taxes on crude and semi-
\nprocessed palm oil, have served to retard the process of economic
\nrestructuring,\" the bank said.<\/p>\n
Although the government lowered tariff rates and surcharges on
\nsome 800 import items in 1994, a host of other products are still
\nsubject to either non-tariff barriers or exceptionally high
\ntariff rates or export taxes, the ADB said.<\/p>\n
Warning -- Page 5<\/p>\n
Asia -- Page 8<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/further-deregulation-needed-adb-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }