Local spending to fuel economic growth in 2002<\/p>\n
Berni K. Moestafa
\nThe Jakarta Post
\nJakarta<\/p>\n
With the current global economic downturn, Indonesia is
\nlooking inward for a push to the economy, as the government said
\non Tuesday it would focus on boosting domestic consumption.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti said the government had several steps in mind to revitalize
\nthe economy at home.<\/p>\n
To bolster the local economy, he said the government would
\nprioritize alleviation of poverty, empower small and medium size
\nenterprises, and focus on decentralization.<\/p>\n
He did not provide details of the plans.<\/p>\n
The government forecast for economic growth next year is set
\nat 4 percent.<\/p>\n
Dorodjatun said that despite the world economic slump, the
\ndomestic economy remained relatively buoyant on the back of
\nstrong consumer spending, and was on track to meet this year's
\ngrowth target of 3.5 percent.<\/p>\n
\"While world markets are down, the domestic market is still
\ngrowing quite fast,\" Dorodjatun told reporters after a meeting
\nwith economic ministers.<\/p>\n
He said signs of a growing economy were evident from the rise
\nin electricity, telephone and fuel consumption.<\/p>\n
\"The growth in the local market has even attracted an influx
\nof smuggled goods like textiles and electronics worth billions of
\nU.S. dollars,\" Dorodjatun added.<\/p>\n
Unlike neighboring countries, Indonesia has been able to post
\neconomic growth as the rest of the world has virtually sunk into
\nrecession.<\/p>\n
Recession began looming after the crash in the U.S. high tech
\nsector early this year led to a slowdown of the world's largest
\neconomy.<\/p>\n
Southeast Asian countries felt the brunt of the contraction in
\nthe U.S. economy, with sharp drops in export revenues.<\/p>\n
Singapore and Malaysia, which before had exported their way
\nout of the 1997 financial crisis, found their export markets
\nshrinking without a strong domestic economy to fall back on.<\/p>\n
Analysts placed Indonesia among a few others like China and
\nIndia whose strong local market has helped mitigate the impact of
\nfalling export revenues.<\/p>\n
But it remains unclear for how long consumer spending could be
\nsustained at current levels and stave off the adverse impact of
\nthe global downturn.<\/p>\n
Strong export sales coupled with high consumer spending had
\nhelped economic growth by 4.8 percent last year.<\/p>\n
That might explain this year's strong consumer spending, but
\nas exports have been falling steadily there needs to be other
\nsources to sustain domestic consumption.<\/p>\n
Investment is also seen declining, mainly because of the
\ncrippled banking sector, and the absence of foreign investment.<\/p>\n
Dorodjatun said this year's total investment levels as of Oct.
\nwere low as against the previous year.<\/p>\n
As of October, the approval of foreign direct investment
\nshrank to $6.47 billion from $13.14 billion in the same period
\nlast year.<\/p>\n
Elsewhere, Dorodjatun said that the government was preparing
\nmeasures to curb rampant smuggling activities.<\/p>\n
He said the increase in smuggled goods had not only caused
\nheavy losses to the state, but also hurt local industries.<\/p>\n
Last week, importers warned that irregularities at the customs
\nand excise office has led to losses of Rp 30 trillion (about $2.8
\nbillion) in uncollected excise revenue each year.<\/p>\n
The government, he said, now planned to review its import and
\nexport inspection services.<\/p>\n
To promote investment in the regions, the government plans to
\nreview 3,000 local regulations deemed as burdensome to investors,
\nhe added.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/local-spending-to-fuel-economic-growth-in-2002-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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