Externals blamed for bleak showing
Rendi A. Witular, The Jakarta Post, Jakarta
President Susilo Bambang Yudhoyono blames external factors for the government's failure to achieve several key economic goals this year, setting aside criticism over the performance of his economic ministers in bringing improvement to the economy.
The devastating tsunami disaster, higher global oil prices and recent terrorist attacks on the resort island of Bali were all used by Susilo to defend his economic team amid a growing calls for a Cabinet shake-up.
"It has been a very tough first year for my government. There have been several unpredictable incidents that caused several of our economic targets to become unattainable this year," said Susilo before a delegation of Japanese businessmen grouped under the Japan External Trade Organization (JETRO) on Monday.
Susilo said the economic team's concentration in improving the economy had been disrupted by these external factors.
He believed external factors played a key role in the declining value of the rupiah against the U.S. dollar, as well as the accelerated full-year inflation, which had surpassed the government's initial single-digit estimation.
Susilo's remarks came days before the first year's anniversary of his government that falls on Oct. 20, when he had pledged to make a review of the performance of all his ministers. It is unclear whether Susilo's statements defending his ministers are an indicator that he may not reshuffle the government's economic team.
Under the last revision of the state budget, the government lowered its target for the rupiah exchange rate from Rp 9,500 to Rp 9,800 to the dollar, despite the fact that the local currency has been hovering at over Rp 10,000 for the past two months.
Some economics ministers have also upped their forecast for full-year inflation from 8.6 percent to about 12 percent this year, with the economic growth projection dropping from 6 percent to 5.7 percent.
With lower growth, the government's target of reducing unemployment by about three million is likely to be unattainable. As of last year, the country's open unemployment stood at 10.3 million.
All this has led to mounting calls from analysts, academicians, businessmen and legislators for a reshuffle in the economic team.
Critics argue that the economy would not have been hit as hard as it was by the external factors had the economic team, led by Coordinating Minister for the Economy Aburizal Bakrie, provide concrete and comprehensive economic policies as a buffer to such problems.
Still, Susilo remained upbeat that the economy would be better in the coming years, citing steady improvement in certain sectors attained by his administration this year, including a rise in exports and investment.
Meanwhile, during a meeting with the President, a JETRO delegate conveyed his concern over rampant corruption, weak law enforcement and uncertainty in the interpretation of law, which had all discouraged foreign investors in doing business in Indonesia.
"We believe that the government is determined to make the business climate better. However, Japanese businesses, particularly small-and-medium ones, are concerned about the rampant corruption," said the businessman.
JETRO is a Japanese government-related organization that works to promote mutual trade and investment between Japan and the rest of the world.