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.