RI targets 1.5% surplus by 2004<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government aims to pull its budget from a chronic deficit
\ninto surplus by 2004, betting on an ambitious boost in economic
\ngrowth and tax revenue, according to the latest slew of economic
\nassumptions released on Tuesday.<\/p>\n
Government data shows it targeting a state budget surplus of
\n1.5 percent of gross domestic product (GDP) by 2004.<\/p>\n
That compares with this year's targeted budget deficit of 2.5
\npercent of GDP, or around Rp 42 trillion (US$4.2 billion).<\/p>\n
Underlying the surplus target is a set of economic indicators
\nthe government hopes to meet, starting from 2000.<\/p>\n
A key indicator that will determine whether or not the budget
\nsurplus can be achieved is economic growth.<\/p>\n
According to the government, the economy should have grown by
\n4 percent to 5 percent in 2000. With growth of 4.8 percent that
\nyear the target was reached, but with 3.32 percent the year
\nafter, it fell short of the targeted 4.5 percent.<\/p>\n
In the following years, the economy must achieve a growth rate
\nof 5 percent to 6 percent in 2002, 6 percent to 7 percent in
\n2003, and another 6 percent to 7 percent in 2004.<\/p>\n
That target now looks difficult to achieve, with the still-
\nsluggish global economy stacked against it.<\/p>\n
There is some faint hope of a turnaround, but analysts said a
\nrebound would unlikely come soon enough to give the economy a
\nsignificant boost this year.<\/p>\n
Until then export revenues would hardly drive the economy
\nwhile investment was also nowhere close to picking up.<\/p>\n
Tax revenues come hand-in-hand with economic growth and over
\nthe next three years the government hopes to expand its tax ratio
\nto 16 percent from 12 percent currently. The ratio compares a
\ncountry's tax revenue with its population size.<\/p>\n
Raising state revenue to generate a budget surplus also
\nrequires the government remove obstacles that have bogged down
\nthe economic recovery so far.<\/p>\n
The country's banking sector is moving too slowly toward
\nrecovery, casting a pall over manufacturers in need of working
\ncapital.<\/p>\n
Elsewhere, a huge portion of Indonesia's economic potential is
\nlocked inside the Indonesian Bank Restructuring Agency (IBRA),
\nwhich took over assets from ailing banks during the 1997
\nfinancial crisis.<\/p>\n
Getting these assets back to work in the hands of the private
\nsector is the key to generating economic growth.<\/p>\n
To achieve a budget surplus, the government is also slashing
\nspending, with cuts in energy subsidies leading the way.<\/p>",
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