Improving indicators leave Habibie hopeful of recovery<\/p>\n
JAKARTA (JP): President B.J. Habibie expressed optimism on
\nWednesday that the economy was on track for a recovery from the
\nyear-long economic crisis because of considerable improvement in
\ninflation and exchange rate indicators in recent months.<\/p>\n
He said the inflation rate during the first two weeks of this
\nmonth was minus 0.7 percent, well below July's level of 8.5
\npercent.<\/p>\n
\"July's inflation was horrifying. But inflation declined to
\n6.5 percent in August, then to 3.7 percent in September, then to
\nminus 0.7 percent during the first two weeks of October,\" he said
\nin a cheerful tone.<\/p>\n
Habibie was speaking at the opening ceremony of the five-day
\nNational Merchandise and Commodity Show (Resource Indonesia '98).<\/p>\n
He said he was encouraged by the recent strengthening in the
\nrupiah.<\/p>\n
\"This morning (yesterday) the rupiah was at Rp 7,050 per U.S.
\ndollar,\" he said, adding that the new level represented a 40
\npercent appreciation from July's exchange rate.<\/p>\n
\"The appreciation is a blessing from God and the result of
\nhard work by all of us, including demonstrators, because
\ndemonstration is part of democracy,\" he said.<\/p>\n
The rupiah has consistently followed an upward track in recent
\nweeks, closing at Rp 7,150 to the dollar on Wednesday, compared
\nto more than Rp 11,000 last month and around Rp 17,000 in May and
\nJune.<\/p>\n
The rupiah traded at around Rp 2,450 in July last year before
\nthe crisis began.<\/p>\n
The consumer price index, the main measure of inflation in the
\ncountry, rose by only 3.8 percent in September, well below
\nincreases recorded in the preceding months. Inflation between
\nJanuary and September this year now stands at 75 percent.<\/p>\n
Bank Indonesia Governor Sjahril Sabirin said recently that
\ninflation should continue to decline in the coming months on the
\nback of the strengthening rupiah and stabilizing food prices. He
\nalso said that he expected inflation to be \"zero\" in October.<\/p>\n
Habibie called on the business community to proactively seek
\noverseas markets for their products in response to a shrinking
\ndomestic market.<\/p>\n
The five-day trade fair, which features more than 800
\nexhibitors, comes at a time of increasing optimism among those
\ninvolved in the country's export industry.<\/p>\n
The textile industry association has predicted an increase of
\nat least 2 percent in total exports this year to US$7.45 billion.<\/p>\n
\"This is quite significant because textile and garments are
\nthe largest non-oil and gas foreign exchange earner and the
\nsector is one of the country's largest employers, providing jobs
\nto around five million people,\" commented M. Manimaren, president
\nof the Texmaco apparel group, which is one of the companies
\nexhibiting its products this week.<\/p>\n
Manimaren agreed with export projections made last week by
\nIrwandy Muslim, the secretary-general of the Indonesian Textile
\nAssociation, saying that \"the economic crisis has forced us to be
\nmore aggressive in selling overseas.\"<\/p>\n
\"The confirmation that more than 3,500 foreign buyers will be
\nvisiting this expo is another indication of an imminent and
\nstrong recovery in our exports, especially those in the textile
\nindustry,\" he added.<\/p>\n
Citing his own group's performance as an example, Manimaren
\nsaid Texmaco had been receiving closer attention from its major
\noverseas buyers in Europe and the United States, including
\nimporters with such well-known trademarks as Ralph Lauren, Tommy
\nHilfiger, Liz Clairborne, Van Heusen, Jones Apoparel and Levi
\nStrauss.<\/p>\n
\"Bolstering exports is the only way out of this economic
\ncrisis and the best means of settling our foreign debts,\" he
\nadded.<\/p>\n
The Texmaco apparel group is a unit of publicly-listed
\nPolysindo Eka Perkasa, Indonesia's largest integrated polyester
\ntextile industry, which manufactures products ranging from
\npurified terephthalic acid, polymer, staple fiber, filament yarn,
\nto fashion fabrics and garments.<\/p>\n
Manimaren said there was a bright outlook in the sector,
\nespecially for companies making textiles and apparels from
\nsynthetic fiber because the main material in their manufacture --
\nnatural gas -- is abundantly available in the country. (prb\/rei)<\/p>",
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