Monday, 21 January, 2008 | 17:19 WIB<\/p>\n
TEMPO Interactive, Jakarta: M. Lutfhi, Head of the Investment Coordination Agency (BKPM), has said he is concerned that the economic recession in the United States will threaten the continuity of domestic industries, especially machine-based manufacturing industries.<\/p>\n
\u201cThe connection is in fact not direct,\u201d said Luthfi in Jakarta last weekend.<\/p>\n
The US recession, he said, will spread to East Asia, with a decrease in the import of Chinese products and then China can pressure Indonesia.<\/p>\n
Lutfhi explained that in the beginning, the sub-prime mortgage and high world oil prices made the US economy sluggish.<\/p>\n
Consumption rate in the USA dropped drastically, followed by a weakening in the demand for industrial goods.<\/p>\n
As a result, the import of goods from the Asian region will also drop.<\/p>\n
Most influenced by the US recession, he went on to say, was China because the country is the largest exporting country to the USA.<\/p>\n
\u201cThat's the problem,\u201d said Luthfi.<\/p>\n
If China's market to the USA collapses, China will probably look for new markets and therefore China's goods will flood countries outside the USA.<\/p>\n
Indonesia will be the most ideal location for a flood of China's products as the large population is a potential market.<\/p>\n
\u201cThis will be a problem to national industrial growth,\u201d said Luthfi.<\/p>\n
The government, he said, must prepare many ways to anticipate this negative effect.<\/p>\n
For example by continue fixing investment climate or giving incentives for national industry.<\/p>\n
\u201cIf that\u2019s not sufficient, then perhaps protection will be required,\u201d he said.<\/p>\n
Contacted separately, the Coordinating Minister for the Economy, Boediono, said the recession flow which is now threatening the US economy need not be worried about excessively.<\/p>\n
He said he was certain that the recession in the USA would not shock the national economy.<\/p>\n
Exports to the USA, he said, would probably slighted affected.<\/p>\n
But the government is not concerned that exports to the USA will decline much because several commodities will still provide a large contribution to export revenues as prices in the international marketplace are still good.<\/p>\n
ANNE L HANDAYANI | AGUS SUPRIYANTO<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/us-recession-threatens-domestic-industries-1200986308", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }