Economy grows by 3.6 percent in 2002: Govt

Economy grows by 3.6 percent in 2002: Govt

The Jakarta Post, Jakarta

The economy grew 3.6 percent last year, slower than the
government's target of 4 percent, according to a preliminary
estimate released by the Ministry of Finance.

The government did not provide the reasons behind the slower
growth, but analysts have said that various uncertainties both at
home and overseas were negatively affecting the economy.

The most profound one is the government's failure to jack up
investment and export performances, which have been dwindling
over the past couple of years.

Economic growth during these periods has mainly relied on
consumption.

Investments, for instance, dropped significantly last year.

The Investment Coordinating Board (BKPM) reported that foreign
direct investment approvals fell by 35 percent to US$9.7 billion
in 2002 from $15 billion the previous year. Domestic investments
were even worse with approvals plunging by 57 percent to Rp 25.26
trillion from Rp 58.6 trillion.

Exports in the first 11 months of last year also declined to
$51.92 billion from $52.10 billion a year earlier.

Experts have said that lingering labor conflicts, security
problems, poor implementation of regional autonomy and corruption
were among the domestic factors discouraging investments and
slowing down exports.

To make matters worse, the Indonesian economy in 2002 had to
weather the storms created by the devastating bomb blasts in the
famous resort island of Bali.

The economic impact of the blasts was so powerful it did not
only hurt the country's tourism sector -- which traditionally is
one of the main sources of foreign exchange revenue -- but also
created more jitters for investors to invest in the country.

The severe impact of the Bali tragedy was reflected in the
government's decision to revise downward its economic target for
this year from 5 percent to 4 percent.