Economy to recover quickly from blast, says Dorodjatun
Economy to recover quickly from blast, says Dorodjatun
Dadan Wijaksana, The Jakarta Post, Jakarta
The government is optimistic the economy will recover quickly
from the shock of Thursday's bombing at the Australian Embassy in
Jakarta, with the impact expected to be limited and short-lived.
"Economic growth will quickly recover. The disturbance to the
economy will only be temporary," Coordinating Minister for the
Economy Dorodjatun Kuntjoro-Jakti said.
Dorodjatun said that during the current administration, the
country had been hit by a series of bomb attacks -- with the Bali
bombing being the most serious -- yet, the economy had always
been able to bounce back.
"I am not saying that it will be business as usual, but we
have the record and procedures to handle this. Let us hope we can
use that momentum to recover again," he said.
In 2002, when huge bomb blasts rocked Bali, killing over 200
people, the economy still grew at 3.7 percent, better than many
expected.
The economy also expanded at a respectable 4.1 percent last
year, driven by strong domestic consumption, despite the bombing
at a Jakarta hotel.
Dorodjatun expected that Thursday's attack would not slow the
pace of economic growth, projected this year at 4.8 percent.
Still, in a country where investment, especially from abroad,
has long been in the doldrums, the blast can only hurt already
low investor confidence.
Analysts have long said that one crucial factor for bringing
back that confidence, which could in turn facilitate the influx
of offshore investors, is maintaining security and political
stability.
"The explosion shows that the threat to security and stability
is still there, which is disturbing as it further increases the
risk of investing here.
"It's the risk that every investors setting their sights on
Indonesia has to take into account," a banker at a state bank
said on Thursday.
Unless there is a swift and quick response to find those
responsible for the attack, and a strong commitment from the
government to prevent similar attacks in the future, authorities
cannot expect a revival of investment, he said.
The central bank also acknowledged the threat the bombing
posed to the economy as security uncertainty could undermine the
rupiah, which in turn would push inflation higher.
"We know that any form of political instability has an impact
on economic stability. But how big the impact will be, we still
have to look at it properly," Bank Indonesia Governor Burhanuddin
Abdullah said.