Rupiah is strong and stable: Mar'ie<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad said
\nyesterday the rupiah was strong and stable and capital inflows
\nremained consistent, giving no evidence of inconsistency in the
\ncountry's economic fundamentals.<\/p>\n
\"One of the most striking features of our economic performance
\nis that we have combined strong economic growth with moderate
\ninflation,\" Mar'ie told the Asia-Europe Business Conference here.<\/p>\n
\"This is in sharp contrast to the situation a few years back
\nwhen the economy showed distinct signs of overheating,\" he said.<\/p>\n
Mar'ie said that inflation, which was nearly 10 percent in
\n1993, had fallen steadily in the past three years to 6.47 percent
\nin 1996, while cumulative inflation for the first six months of
\nthis year was only 2.54 percent, the lowest recorded in the
\n1990s.<\/p>\n
\"There is little reason to suspect any resurgence of inflation
\nin the short-term,\" Mar'ie said.<\/p>\n
The minister's comment comes amid growing concerns that a
\ndomino affect could result from the Thai baht devaluation on July
\n2.<\/p>\n
The Philippines peso has been under speculative attack since
\nMonday.<\/p>\n
But a Tokyo-based analyst with Kukusai Securities, Yi Chang,
\nwas quoted by AFP as saying yesterday that Indonesia was unlikely
\nto follow Thailand, as over the past 10 years it had depreciated
\nits currency by 2 percent to 5 percent annually.<\/p>\n
Mar'ie said Indonesia's economy was in good shape despite the
\nsocial disturbances during the May election campaign period.<\/p>\n
\"Our growth prospects for the current year remain strong and
\nreal per capita income now stands at approximately US$1,150,\" he
\nsaid.<\/p>\n
Difficulties<\/p>\n
But Mar'ie warned difficulties might arise from the export
\ngrowth slowdown, non performing loans, inefficient government
\nofficials and environmental degradation.<\/p>\n
He said non-oil export growth had fallen to 8.9 percent last
\nyear from 15.1 percent in 1995.<\/p>\n
The expected recovery in commodity prices should help the
\ncountry's exports but this will be partly offset by an expected
\ndecline in world oil prices.<\/p>\n
Indonesia should regain its industrial competitiveness by
\nestablishing more skilled (knowledge-based) and capital intensive
\nindustries but should not neglect its labor intensive industries
\nwhich create a lot of jobs, he said.<\/p>\n
Indonesia has improved the quality of its human resources in
\nits drive toward skill intensive industry, he said.<\/p>\n
Mar'ie said Indonesia's banking system was still sound despite
\ncases of non performing loans.<\/p>\n
He said the ratio of non performing loans to total credit
\npeaked in 1993 at 14.2 percent.<\/p>\n
To improve the situation, Bank Indonesia raised the reserve
\nrequirement in April this year and issued the following month a
\nnew rule governing off-shore commercial borrowings as well as
\nimproving the requirements for such loans, he said.<\/p>\n
It also banned loans for land acquisition and land development
\nfor medium and large properties.<\/p>\n
The capital adequacy ratio will be raised in September this
\nyear and banks will be encouraged to write off bad loans when
\nappropriate, he said.<\/p>\n
The government planned to strengthen state-owned banks by
\nmerging them, said Mar'ie.<\/p>\n
The minister emphasized the importance of good governance in
\nsustaining long term growth.<\/p>\n
\"We must create a good governance to protect the weakest
\ncitizens and ensure fair and open transactions,\" Mar'ie said.<\/p>\n
\"We have come to recognize good governance is essential in
\nensuring that growth is accompanied by social justice,\" he added.
\n(jsk)<\/p>\n
Editorial -- Page 4<\/p>\n
Related photo -- Page 10<\/p>\n
Related story -- Page 12<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rupiah-is-strong-and-stable-marie-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }