The country's business community and entrepreneurs deem the President's state address a disappointment as the state budget allocation for infrastructure is lower than expected.
"The allocated budget for infrastructure is only 3 percent, when the country actually needs at least 6 percent to stimulate high economic growth. After all, investment and growth run commensurate to infrastructure development," said the Indonesian Chamber of Commerce and Industry's (Kadin) Fixed Fiscal and Monetary Committee head, Bambang Soesatyo, on Friday.
Kadin chairman MS Hidayat said the government had turned down the committee's suggestion of a 6 percent budget increase for infrastructure.
Hidayat said the state's oil price forecast for 2009 was overly optimistic, as it did not account for current market fluctuations and price instability.
"I'd say setting the price at US$110 per barrel would've been more realistic, bearing in mind current market tendencies," he told The Jakarta Post by phone Friday afternoon. "I'm sure the government has its reasons for such a prediction."
Standard Chartered Bank Jakarta analyst Fauzi Ichsan, however, did not agree, saying that the government's forecasted figure was in fact realistic.
"Taking into account the current recession in the United States and global economic developments, there's a trend that world oil price will continue to decrease," said Ichsan, whose qualm lay in the government's forecasted budget deficit.
"Developments within the last two years have shown that the state has been having problems in dispatching project funds. The central government and regional administrations both have been having issues in the timely implementation of development projects," he said. (*)
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