Chief economics minister targets job creation
Chief economics minister targets job creation
JAKARTA (JP): Indonesia's new Coordinating Minister for the
Economy Dorodjatun Kuntjoro Jakti said on Thursday he would focus
on job creation to expedite economic recovery.
He said implementation of the fiscal decentralization policy
and reducing the country's massive foreign debts were also among
his top priorities.
"Whatever the economic recovery plan is, it will be difficult
to make it a success without job creation," Dorodjatun said at
his home, shortly after President Megawati Soekarnoputri
announced her Cabinet lineup.
According to him, the task of creating more jobs has slipped
the government's attention for three years now.
The previous government came under fire for failing to
encourage investment, which can create new jobs.
"We need our private sector to recover, as it is this sector
that can create new jobs," he explained.
Helping the private sector, however, requires Bank Indonesia
to loosen its monetary policy to lower the cost of investments.
The central bank has been keeping interest rates high to ease
pressure on the rupiah and curb high inflation growths.
The central bank said it was in no hurry to lower the rates,
not until after signs of economic recovery became evident.
Bank Indonesia Governor Sjahril Sabirin told local television
stations that the rupiah could remain strong on market confidence
in the new government.
Dorodjatun also expressed concern over keeping the budget
deficit at around 3.8 percent of gross domestic product (GDP).
Pressure from the weaker rupiah and missed tax revenue targets
during the first half is threatening to widen the deficit.
A large portion of government spending is U.S dollar
denominated, with others tied to Bank Indonesia's high interest
rates.
"The creation of more jobs, concrete results from the regional
autonomy, and a resolution to our debt problems, will lead us, in
probably several months, to a more stable rupiah," Dorodjatun
said.
He said much of the country's budget woes stemmed from the
country's massive foreign debts.
This year alone, Indonesia must pay debts of Rp 120 trillion,
(about US$13.1 billion) of which half was foreign.
Tackling the foreign debts, however, hinges on Indonesia's
ability to patch up relations with the global financial
community.
Dorodjatun, who was previously the ambassador to the United
States, is seen by many as the right person for the job.
He promised to press ahead with the signing of the letter of
intent (LoI) with the International Monetary Fund (IMF) -- a key
step in improving Indonesia's credibility before creditors.
Newly appointed finance minister Boediono agrees, saying the
LoI will pave the way for restructuring Indonesia's debts.
"We must secure the second Paris Club meeting," he told
visiting reporters at his home.
The club, which groups together Indonesia's sovereign
creditors, will reschedule $2.8 billion in maturing debts this
year if a deal with the IMF is at hand.
Boediono said his other priority was to draw up the 2002 draft
state budget as there was not enough time to consult with the
legislators.
He also called for better coordination between the government
and Bank Indonesia.
The two had often been at loggerheads, as the central bank's
high interest rates hurt the government's fiscal targets.
"We must synchronize the policies of the fiscal and monetary
authorities," he said.
Meanwhile new Minister of Industry and Trade Rini Soewandi has
set her eyes on efforts to boost export revenue this year.
Indonesia's export growth has been hurt by a global economic
slowdown, and high investment costs hampered expansion plans.
The government initially hoped to outgrow last year's export
revenue of some $65 billion by 10 percent. It later revised its
growth target to 7 percent.
Rini, former president of giant automaker PT Astra
International, said she hoped to outline a program to boost
export revenue.
She said the rupiah's recent strength added to sales pressure,
but competitive products might still make a turnaround in export
sales.(bkm/tnt)