Develop the local market

The appreciation of the rupiah's value against the dollar, though encouraging, must be greeted with caution because this current is caused more by a weakening of the dollar than by a strengthening of the rupiah. The rupiah's appreciation is thus, more than anything else, the result of an external factor -- that is, the projected decline of the U.S. economy, which has prompted that country's central bank to lower the interest rate by 0.25 percent.

Economists and market analysts are generally agreed that the American economy will suffer a decline in the coming year as a result of the protracted crisis in Asia and Eastern Europe. Some experts even believe that a recession could set in.

Any economic setback in the United States, which has so far been the most important export market for Indonesia, naturally holds the potential to make things even worse for us. Japan, which is also one of our major export markets, has still not recovered, while the European Union seems occupied with its Eastern European neighbors, who are suffering under a no less severe economic crisis.

We, for our part, should regard such projections as a warning signal that the export market cannot always be depended on. It appears prudent that we start making the domestic market a primary means of support for our national economy. We hope that the government can soon start taking more significant steps towards exploiting our domestic market's potentials, particularly by improving the public's purchasing power. If necessary, this could be achieved by reducing taxes.

-- Bisnis Indonesia, Jakarta