RI economy defies trend, grows by 3.5%<\/p>\n
Berni K. Moestafa and Febiola Desy Unidjaja, The Jakarta Post, Jakarta<\/p>\n
Defying the negative trend of its regional peers hit by the
\nglobal economic slump, Indonesia's economy grew by around 3.5
\npercent for the whole of last year, the government said.<\/p>\n
\"This relative good performance can be attributed, among other
\nthings, to the strong growth of the domestic market, pushed by
\ndemand for consumer goods and by local investment,\" a statement
\nof the office of the coordinating minister for the economy said
\non Thursday.<\/p>\n
It marked the first official statement on last year's economic
\ngrowth rate, albeit using a preliminary figure.<\/p>\n
With 3.5 percent, the economy as measured by Indonesia's gross
\ndomestic product (GDP), grew slower than it did in the previous
\nyear, when it grew 4.8 percent.<\/p>\n
Some other Southeast Asian economies were expected to grow at
\na far lower rate, with some others contracting.<\/p>\n
So far, Singapore came in the worst with a 2.2 percent
\ncontraction of its economy last year. Thailand and Malaysia may
\nstill record a modest growth of 1.5 percent and 3 percent
\nrespectively, but lower than what they had projected for last
\nyear.<\/p>\n
The sharp downturn in the world economy is to blame, led by a
\nplunge in the high tech sector among developed nations.<\/p>\n
Even before the Sept. 11 terrorist attacks on the United
\nStates, most Southeast Asian countries were reeling from slower
\nexports.<\/p>\n
Indonesia is among the few Asian countries like China and
\nIndia, that have been the least affected by the shrinking high
\ntech markets.<\/p>\n
Sales of products like shoes and agricultural commodities
\nremained relatively strong, including into the U.S.; still the
\nnumber one export market for Indonesian products.<\/p>\n
The global economic slowdown did take its toll on overall
\nexport sales, which fell 8.25 percent in the first 11 months of
\n2001.<\/p>\n
Foreign direct investment also shrank. Companies consolidating
\ntheir operations worldwide, dropped expansion plans, with others
\navoiding investing in emerging markets.<\/p>\n
Foreign investment approvals last year fell by a hefty 49
\npercent to US$6.5 billion as of October, the government said.<\/p>\n
Analysts said this drop could be traced to both the downturn
\nin the global economy and the continued adverse investment
\nclimate here.<\/p>\n
Foreign investors moved to the sidelines during the political
\nturmoil of the first six months of the year preceding President
\nAbdurrahman Wahid's ouster last July.<\/p>\n
As political stability returned concerns have now shifted to
\nthe country's weak legal system and threats to its security.<\/p>\n
But in the same period that foreign investment plunged 49
\npercent, local investment approval surged 61 percent to Rp 71
\ntrillion (about $6.8 billion).<\/p>\n
The figure reflected a strong domestic market, which the
\ngovernment said had generated growth in all business sectors.<\/p>\n
\"High growth rates were recorded in the power sector, the gas
\nsector, the clean water sector, the transportation and
\ncommunications sector and the trade and manufacturing sector,\" it
\nsaid.<\/p>\n
Some analysts said Indonesia's ability to maintain growth was
\nmostly due to the fact that its economy was still climbing out of
\nthe lows that came with the 1997 financial crisis.<\/p>",
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