Drought will add pressure to economy: Ginandjar

JAKARTA (JP): The prolonged dry season, in addition to the government's retrenchment program, will add pressure to the country's economy.

State Minister of National Development Planning Ginandjar Kartasasmita said here yesterday the long dry spell would inhibit growth in the agricultural sector and the gross domestic product.

"This year's economic growth will be greatly influenced by the severity of the drought," Ginandjar told journalists after accompanying President Soeharto in a meeting with visiting Japanese legislator Yasuo Fukuda.

Secretary-general at the Ministry of Agriculture, Syarifuddin Karama, said Thursday the country's rice production was expected to fall this year to 50.4 million tons from 50.6 million tons in 1996 due to the prolonged dry season.

The drought is expected to cause harvest failure of about 300,000 hectares of rice fields this year.

It is feared that rain will come as late as December.

Ginandjar, however, was optimistic that the country could achieve an annual economic growth average of 7.1 percent during the Sixth Five-year Development Program, ending in March 1999.

In the last three years, the economy has grown by an average 7.9 percent per annum. If economic growth can be maintained at 6 percent this year and the next, the overall target can still be achieved, Ginandjar said.

But Ginandjar declined to predict the economic growth level for this year and the next, as it would depend on many factors, including the current currency crisis.

"Factors which can affect our economic growth not only include the recent monetary crisis and the rupiah fluctuation, but also drought which could influence agricultural output," Ginandjar said.

He said a budget cut and the postponement of major projects would also affect growth.

The government announced Tuesday the postponement of Rp 38.92 trillion (US$13.2 million) worth of investment projects sponsored by state and private companies and the review of other projects worth Rp 62.29.

It also rescheduled projects worth Rp 3.28 trillion to be financed by the state budget as part of the drastic measures to withstand the recent currency crisis. (prb)