Corruption-eradication drive 'key' to investor confidence

Corruption-eradication drive 'key' to investor confidence

The Jakarta Post, Jakarta

The government must continue strengthening Indonesia's economic
fundamentals if it wants to sustain average economic growth of 5
percent per year, the International Monetary Fund (IMF) says.

The fund's Asia and Pacific department chief, Odd Per Brekk,
said on Thursday among the items the government should prioritize
were keeping inflation at a manageable level and attracting
foreign direct investment (FDI) to the country.

"The government must improve its fiscal policies and its
governance in related sectors," he said during a hearing with
House of Representative Commission XI on financial affairs.

The meeting with the legislators was held to exchange views
and assessments of the country's economy.

Another issue the government should concentrate, Per Brekk
said, is stopping corruption, which is crucial for reestablishing
the country's credibility among foreign investors.

Since taking office in October last year, President Susilo
Bambang Yudhoyono has repeatedly said the anticorruption drive is
one of his administration's top priorities, although critics say
little has actually been done to stop the practice.

"Poverty eradication and reducing the unemployment rate should
also be among the government's priorities," he said.

Per Brekk also said the banking sector should be improved,
with the central bank being key to establishing strong monetary
policies for the country's economic sustainability and
establishing a healthy banking industry to ensure development
financing from FDI.

The government is targeting gross domestic product growth of
5.5 percent this year, up from 5.13 percent last year.

The IMF has forecast the same growth rate for Indonesia's
economy.

Over the next three years, the government hopes to achieve an
average economic growth of 6 percent per year, with that figure
reaching 7.2 percent by 2008.

Indonesia needs at least 6 percent economic growth just to
absorb the more than two million new workers who enter the job
market every year.