Government to resume mega projects
Government to resume mega projects
The Jakarta Post, Jakarta
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti said on Tuesday that the government would recommence the
development of several mega projects at the end of next month as
the country's economic fundamentals had improved.
Speaking before domestic and foreign investors here,
Dorodjatun said the projects would be the engine of economic
growth in the coming years.
"The projects are, among others, Tanjung Jati B in Jepara,
Paiton III and IV, Tuban Petrochemical and fertilizer producer PT
Pupuk Iskandar Muda in Aceh," Dorodjatun briefed investors during
a business luncheon held by Ekonid, an association of German and
Indonesian business interests here.
He did not provide details.
Some of the projects, such as the Tanjung Jati B power project
in Jepara, Central Java, and the Tuban Petrochemical project in
East Java, were halted in 1997 due to the economic crisis.
Others are new projects such as Paiton III and IV in East
Java.
Dorodjatun said the country's macroeconomic fundamentals had
been improving as shown by the stronger exchange rate of the
rupiah against the U.S. dollar, and the buoyant stock market.
The rupiah has been appreciating since the beginning of this
year.
The rupiah is firmly hovering between Rp 8,000 and Rp 9,000
per U.S. dollar, and is strengthening by the day.
The rupiah has appreciated 19.83 percent since early this year
from Rp 10,473 to Rp 8,740 last week.
The JSX composite index has also improved. The stock market
has been one of the best performing markets in the region.
Early this year, the JSX composite index opened at 383.5 and
closed last week at 545.08. Some analysts predict the index will
reach 600 by year-end.
A stable political landscape, the return of funds from
overseas and the sale of bank assets by the Indonesian Bank
Restructuring Agency (IBRA) are seen as contributing factors to
the strengthening of the rupiah and developments on the stock
market.
Meanwhile, Didik Rachbini, an economist at the Institute for
Development of Economics and Finance (Indef), said the government
must first discuss the new plan with legislators because there
had been suspicions of cost mark-ups in some of the projects.
He added that careful planning was essential because the
projects would use a huge amount of foreign loans, which could be
detrimental to the economy in the future if the loans were not
well managed.
"Should that happen, how to return the loans? The government
should think twice before starting the projects, and a second
opinion from the House of Representative is badly needed," said
Didik.