Govt seeks options for dealing with global recession<\/p>\n
Berni K Moestafa, The Jakarta Post, Jakarta<\/p>\n
After repeated calls for an emergency package to cope with a
\nglobal recession, the government promised on Tuesday it would
\nseek input on how to best safeguard the country's flagging
\neconomy.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti said he would hold a national brainstorming to assess
\ndevelopments in the global economy.<\/p>\n
For this purpose, he said, the government would gather input
\nfrom local and international think tanks.<\/p>\n
\"We will collect the studies; we've been promised studies from
\nthe IMF (the International Monetary Fund), the World Bank,
\nAmerica, Japan, and the Asian Development Bank (ADB),\" Dorodjatun
\nwas quoted as saying by Detik.com.<\/p>\n
\"I have also contacted local think tanks,\" he said, citing the
\nUniversity of Indonesia's Institute for Economics and Social
\nResearch (LPEM), the Centre for Strategic and International
\nStudies (CSIS), and the Danareksa Research Institute.<\/p>\n
He hoped the government could draw up a solution prior to the
\nmeeting of the Consultative Group on Indonesia (CGI) on Nov, 7.<\/p>\n
The CGI, grouping Indonesia's main donor countries, will
\ndiscuss the country's loan requirements for next year's budget.<\/p>\n
Ownership of an emergency plan for the global recession will
\ncome in handy as the government seeks more loans from the group.<\/p>\n
Last month's terrorist attacks against the U.S. have pushed
\nthe world to the brink of recession.<\/p>\n
The attacks sent U.S consumer and business confidence into a
\nnosedive, a phenomenon that is hitting economies worldwide.<\/p>\n
Dorodjatun estimated the recession to last until the second
\nquarter of next year. He warned that worse was yet to come.<\/p>\n
\"I expect freight costs to surge, especially after I was told
\nby the State Minister of Tourism and Culture (I Gede Ardika) that
\nthe global travel industry has plunged by 30 percent,\" he said.<\/p>\n
\"At present there are too many uncertainties; by next week
\nwe'll have more information based on the studies I expect to
\nreceive,\" he added.<\/p>\n
In another effort to adjust to the changes, legislators have
\napproved the government's proposed revision of assumptions used
\nfor the 2002 state budget.<\/p>\n
Meanwhile, calls have grown stronger for an emergency package
\nthat experts said should ease the impact of a global recession.<\/p>\n
Trade organizations urged higher import tariffs to protect
\ndomestic industries, lower interest rates to reduce the cost of
\ninvestment and better security and legal certainties.<\/p>\n
Economist Raden Pardede of PT Danareksa Securities has cited
\nsecurity, legal and political stability as preconditions for any
\nemergency package to work properly.<\/p>\n
\"When people feel uncertain about the future, they prefer to
\nhold cash, meaning that money in circulation increases. For this,
\nBank Indonesia has kept its interest rates high,\" he explained.<\/p>\n
He added that a fiscal stimulus under this and next year's
\ntight budget was unlikely, unless revenue targets were raised.<\/p>\n
Better tax collection, privatization, asset sales, and the
\nraising of foreign loans were among the best ways to boost
\nrevenue, he said.<\/p>\n
But asset sales and privatization, he said, were sensitive
\nissues as they often concerned national pride.<\/p>\n
\"If we want a stimulus, there is a price to pay, like paying
\ninterest on new loans or losing ownership of assets,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-seeks-options-for-dealing-with-global-recession-1447893297",
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