Government's cutback measure 'not enough'

Government's cutback measure 'not enough'

JAKARTA (JP): Economist Djisman S. Simanjuntak said yesterday
the government's retrenchment program was good in terms of cost
saving but further measures were needed.

"It is a good move, but it is not good enough. The most
important thing is to reduce the consumption of imported products
to curb the growth in the current account deficit."

In addition, household consumption on imported products should
be lowered," said Djisman of the Institut Prasetia Mulia (IPM)
management school.

"It is also important to increase exports and productivity,"
Djisman said on the sidelines of a business forum held by Bank
Bumi Putera.

Yogyakarta's Gadjah Mada University economist Tony
Prasetiantono said the rescheduling of some big projects would
improve the macro economy.

"Of course the government's move will have some risks like
slower economic growth and unemployment... but it is good," Tony
said as quoted by Antara.

The government announced last week that it would postpone or
review government and related projects worth US$38 billion to
cope with the sharp drop in the rupiah against the U.S. dollar.

The rupiah and other Southeast Asian currencies have been
under attack following the devaluation of the Thai baht in early
July. The rupiah has depreciated by about 20 percent against the
U.S. dollar since then.

Djisman estimated that economic growth would grow by only
about 5 percent this year as a result of the cutback measures as
compared to 7.8 percent last year.

He said that investment would grow by 7 percent or 8 percent
this year, down from 11 percent last year.

Miranda S Goeltom, an economist and expert at the office of
the Coordinating Minister for Finance and Development Supervision
also hailed the government's rescheduling measure.

But she urged the government to improve information
transparency to the public. Goeltom said the recent currency
crisis was partly caused by a lack of information.

"The government should tell the public what sectors to
deregulate... and what action to take. This is aimed at
increasing information transparency to the public," she said.

Otherwise, she said, the public would continue to use
speculative practices due to the lack of information on steps
taken by the government. (aly)