Tue, 30 Nov 2010

Jakarta (ANTARA News) - The government will not impose limits on foreign capital flows into the country but channel them so as to spread them evenly over different sectors, a spokesman said.

"We will not in any way put limits on foreign capital inflows but we intend to spread the flows over various sectors of the economy," Coordinating Minister for Economic Affairs Hatta Rajasa said at a discussion themed "Indonesian Economic Outlook 2011" here Monday.

He said the capital inflows were like "water that flows over an expanse of dry cultivation land."

"The capital flows must be managed well so that they do not become unwanted floods in certain cultivation areas. We must use several instruments to make the water spread evenly," he said.

Foreign funds entering Indonesia should not be considered a threat because the country needs more capital to move the economy, Hatta said.

At the latest G-20 forum, several countries had expressed concern that there would be a sudden reversal in the foreign capital inflows.

"The most important thing is how to absorb the capital inflows efficiently and manage them well" Hatta said.

He also said the rupiah`s continuous appreciation was also not something to be too worried about.

"We are not the only country experiencing a national currency appreciation problem. Other countries are undergoing an even stronger appreciation of their national unit," he said.

Hatta also said the foreign capital inflows actually provided a momentum for domestic companies to raise additional funds from the capital market by going public and issuing bonds.

"The capital market must be utilized optimally and consequently, we are considering the privatization of 12 state-owned companies through IPOs (Initial Public Offerings) in 2011," Hatta said.(*)