Govt to maintain prudent monetary, fiscal policies<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad pledged to
\nmaintain prudent monetary and fiscal policies to anticipate and
\nface global economic trends.<\/p>\n
\"To face the global changes and challenges, we need to
\ncontinue and enhance a prudent, or even a very prudent approach
\nin managing our economy, including fiscal and monetary affairs,\"
\nMar'ie said in his speech at Airlangga University's 41st
\nanniversary in Surabaya, East Java, on Saturday.<\/p>\n
Mar'ie noted that by taking an extra-prudent approach, it does
\nnot mean that Indonesia takes a passive, static or even stagnant
\napproach to its economic management. \"This extra-careful approach
\nwill make us always ready to face the worst condition ever.\"<\/p>\n
As world economic trends move very quickly and are very
\ntransparent, liberal and full of uncertainties, Indonesia needs
\nto closely monitor and anticipate the trends and continuously
\nadapt its economy to the trends, especially those prevailing in
\nits prime trade partners.<\/p>\n
He warned that any instability in the world's leading
\neconomies would affect other economies, especially the developing
\nones. Mexico's monetary crisis early this year, which almost
\ndragged other emerging economies, including Indonesia, into
\nanother crisis, serves as a good example.<\/p>\n
\"Indonesia was successful in avoiding the negative impact of
\nthe Mexican crisis by minimizing speculations,\" Mar'ie said.
\n\"This success was closely related to the condition of our
\neconomic fundamentals, the government's quick reaction to the
\ncrisis and the business sector's trust in our fiscal and monetary
\nauthority.\"<\/p>\n
Mar'ie said that prudent fiscal and monetary policies should
\nbe followed by efficient management on the side of the \"real\"
\nsectors. \"To make our national development programs a success
\nstory, it needs strong and sustainable coordination between the
\nfiscal and monetary sectors.\"<\/p>\n
He noted that the direction of Indonesia's fiscal and monetary
\npolicies would be much influenced by the private sectors, both
\ndomestic and overseas, which had been contributing a large
\nportion of investment funding in the country.<\/p>\n
Efficiency<\/p>\n
\"Therefore, any inefficiency on the part of the private sector
\nwill seriously affect our efficiency record on the national
\nlevel,\" the minister said.<\/p>\n
He said that to improve the country's efficiency, the
\ngovernment would continue bringing down the remaining high
\ntariffs, to a level of a maximum of 10 percent by 2003, when the
\nagreement on the ASEAN Free Trade Area is fully implemented.<\/p>\n
The Association of Southeast Asian Nations (ASEAN) groups
\nBrunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand
\nand Vietnam.<\/p>\n
Mar'ie said the government is also gradually removing non-
\ntariff barriers and changing them into tariff barriers, as
\nrequired by the World Trade Organization, of which Indonesia is a
\nmember.<\/p>\n
\"However, it needs to be noted here that a number of developed
\ncountries are introducing new non-tariff barriers, which were
\npreviously not recognized both in practice and in theory. They
\nare like those related to eco-labeling, as well as labor wages,
\nwhich they consider as disguised subsidies,\" Mar'ie said.<\/p>\n
The minister then explained long-term prudent fiscal and
\nmonetary policies, which are expected to be adaptive to global
\neconomic trends. The policies include:<\/p>\n
* Maintaining the concept of balanced and dynamic budgeting
\nand improving the budget discipline, both on the earning and the
\nspending sides. On the earning side, the government will
\nconsistently enhance domestic revenues, especially those from tax
\nand other sectors. On the spending side, it is necessary to
\nminimize the leaking of the funds and unnecessary spending.<\/p>\n
* Taking a contractive budgeting policy to reduce inflationary
\npressures and avoid the country's economy from overheating. The
\ngrowth of money supply and bank credits is maintained at a safe
\nlevel.<\/p>\n
* Maintaining the policy of floating exchange rates to
\nsafeguard Indonesia's currency stability, as well as improve the
\ncompetitiveness of Indonesia's export commodities.<\/p>\n
* Continuing efforts to reduce the current account deficits by
\nencouraging more non-oil exports, as well as deficits in trade of
\nservices.<\/p>\n
* Improving the public's savings, to reduce the country's
\ndependence on foreign debts. To reduce its foreign debt burdens,
\nespecially those with high interest rates, the government can
\nsell its healthy state firms on overseas stock markets.<\/p>\n
* Encouraging the private sectors to generate funds from stock
\nmarkets, either local or overseas exchanges, to slow down the
\nincoming rate of the private sectors' foreign debts.<\/p>\n
* Continuing deregulatory measures, to further cut the
\ncountry's import tariff levels and remove non-tariff barriers to
\nimprove Indonesia's global competitiveness. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-maintain-prudent-monetary-fiscal-policies-1447893297",
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