Govt draws up economic action plan for 2004

Govt draws up economic action plan for 2004

Fabiola Desy Unidjaja/Dadan Wijaksana, The Jakarta Post,
Jakarta

The current government, whose term will end in 10 months, has
vowed to improve the economy this year by capitalizing on
improved economic momentum worldwide to counter possible
uncertainties resulting from nationwide elections.

Improving economic performance would remain the focus of the
government, and the government planned to do its best to keep the
economy from being disrupted by the election process,
Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti
said on Monday.

"The election is not an excuse to neglect the economy,
especially when we see various signs of a recovery worldwide.
Many have predicted that the pace of an economic turn-around
would increase this year," he announced after a Cabinet meeting
-- the first this year -- with the main agenda of laying down
guidelines for the government to manage the country's economy
throughout the year.

Dorodjatun said that generating higher economic growth would
be the highest priority. The government hopes to achieve this
mainly by improving the country's business competitiveness.

"The only way to improve competitiveness is by addressing
problems hampering exports and investment performance. Those
tasks will be carried out by respective teams," he said,
referring to the two teams consisting of Cabinet ministers set up
to formulate ways to boost exports and investment performance.

He did not give details about how to resolve those problems
but various reports have noted that drawing up a competitive tax
policy, continued reform in the customs office, reducing labor-
related conflicts and promoting legal certainty were all among
the priorities to be quickly addressed.

All those have become contributing factors to the country's
lower-than-expected economic growth over the years as rapid
recovery in exports and investment performance has remained hard
to come by, thus stalling efforts to reduce poverty and
unemployment.

Dorodjatun admitted that there had been slow progress in the
fight against poverty and unemployment, saying it was the result
of a difficulties in translating a sound and improving
macroeconomic climate to the various microeconomic sectors.

In the past two years or so, most of Indonesia's macroeconomic
indicators have improved -- except for the unemployment rate --
as seen partly in the stable rupiah and easing inflation. But it
has only helped drive the economic growth to a relatively
stagnant 3 percent to 4 percent.

Such growth is insufficient to absorb a net influx of 2.5
million people entering the job market annually, meaning that the
country's unemployment rate has been increasing.

Elsewhere, he said, another priority for the current economic
Cabinet team was to make sure that during the elections, which
will take place from April to September, economic activities will
have to go on as much as normal as possible.

"This also applies to the distribution of basic needs, which
is very important to help maintain social stability during the
elections from the economic side," he said.

High also on the government's economic agenda this year was
the drawing up of the 2005 state budget bill, which normally has
to be submitted to the House of Representatives around August or
September.

"That will be our last budget proposal. It is the task of the
next government to deliberate the bill into a law," Dorodjatun
said.