Policy change needed to maintain growth<\/p>\n
JAKARTA (JP): Indonesia's economic growth is likely to
\ncontinue declining if the government does not review its current
\nmacroeconomic policies, particularly those on export and import
\nprocedures, an economist says.<\/p>\n
Anwar Nasution of the University of Indonesia's School of
\nEconomics said yesterday Indonesia's non-oil and gas exports were
\ncurrently at a stagnant level.<\/p>\n
This meant the government had to create more deregulatory
\nmeasures in the trade sector because current policies did not
\nsupport the country's export growth, he said.<\/p>\n
The official Gross Domestic Product growth figure of 7.82
\npercent last year was much lower than the 8.21 percent recorded
\nin 1995, he said.<\/p>\n
Anwar predicted that the economy would continue the same
\npattern of the past two years and continue declining if there
\nwere no adjustments in economic policy.<\/p>\n
"Continuous deregulations are needed particularly in the
\ndomestic investment and trade sectors," he said, as quoted by
\nAntara.<\/p>\n
Economists earlier this week warned that microeconomic policy
\ninconsistencies would weigh down the country's macroeconomic
\nmanagement and eventually cause its economic downfall.<\/p>\n
They said many government policies, instead of leveling out
\nthe country's business climate, had caused market distortions and
\nbenefited only certain groups.<\/p>\n
But the macroeconomy seemed unaffected by the situation,
\ngiving the impression there was no linkage between microeconomic
\nand macroeconomic policies.<\/p>\n
Nasution said yesterday that many policies in the trade sector
\ncaused disadvantages, such as illegal levies and heavy red tape,
\nall of which could eventually cause export prices to be
\nuncompetitive.<\/p>\n
Indonesia's total export volume in the January to November
\nperiod of last year dropped 12.8 percent to 193.86 million tons
\nlast year from 224.46 million tons in the corresponding period of
\n1995.<\/p>\n
However, the agricultural and industrial sectors recorded a
\nsignificant rise during that period, he said.<\/p>\n
Nasution predicted this was a result of the government's
\n"special attention" to both sectors that year.<\/p>\n
"Currently our markets are flooded with fresh fruit imports.
\nThis is happening because the government has not given proper
\nsupervision to farmers. As a result the farmers can plant, but
\ncannot handle plant diseases," he said.<\/p>\n
Nasution pointed out that Canadian Agriculture Minister Ralph
\nGoodale said recently that Indonesia was a potential market for
\nprocessed food.<\/p>\n
This, he said, indicated that Canada was planning to increase
\nits exports of processed food to Indonesia.<\/p>\n
In 1995, Canada's total exports reached C$113 billion. It
\nincreased by more than 100 percent to C$294 billion last year.<\/p>\n
Nasution said Indonesia would merely remain a market if the
\ngovernment refused to quickly review its policies so domestic
\nbusinesses would be willing to operate in sectors such as
\nagriculture. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/policy-change-needed-to-maintain-growth-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}