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.