Govt points to progress, but chronic problems remain
Govt points to progress, but chronic problems remain
The Jakarta Post
Jakarta
A persistently high unemployment rate and the problem of chronic
graft in the bureaucracy leading to a high cost economy are
overshadowing the current administration's successes in
maintaining macroeconomic stability, a government report shows.
The recent soaring of global oil prices and interest rates,
meanwhile, could also loom as potential risks that could derail
Indonesia's economy, which is projected to produce growth of as
much as 6.2 percent this year.
Presenting a report on the country's economic progress during
President Susilo Bambang Yudhoyono's first six months in office,
Coordinating Minister for the Economy Aburizal Bakrie admitted
that unemployment was still high despite economic growth of over
6 percent in the past two quarters, and that the government had
not yet been able to address it.
"The rate at which the economy has been growing so far is
still insufficient to create enough jobs for the country's
unemployed," he said.
"We still need growth of 6.6 percent to be able to halve the
unemployment and poverty rates over the next five years."
Indonesia's gross domestic product (GDP) grew by 5.13 percent
last year, the Central Statistics Agency (BPS) reported, creating
only some 2 million new jobs. The country's unemployment figure
currently stands at 10.3 million people, or some 10 percent of
the total workforce.
During his presidential campaign, Susilo promised to create 15
million new jobs during his five-year term -- or three million
jobs annually -- on an average economic growth rate of 6.6
percent per year.
A recent report from the manpower ministry said 22,647 workers
in the formal sector had lost their jobs in the first quarter of
this year as companies shut down or downsized.
Accordingly, Aburizal said that the government would therefore push the
economy to grow further than its earlier estimate of 5.5 percent
for this year, focusing on labor-intense investments in the
agriculture, construction and manufacturing sectors.
And the government was upbeat about this, Aburizal said, as
the BPS reported earlier this month that Indonesia's economy
managed to grow by 6.35 percent during this year's first quarter,
following last year's final quarter growth of 6.65 percent --
both on the back of improving foreign direct investment (FDI).
"Investment is picking up, and we expect the trend to continue
until the end of the year," he said. "With this, we're quite sure
that the economy will be able to grow between 5.8 percent and 6.2
percent this year."
The government, however, still faces a daunting task in
improving the country's investment climate, particularly in
eradicating rampant corruption and graft throughout the country.
Citing the example of illegal fees at the country's ports,
Aburizal said the government would conduct a thorough review of
the legal fees charged by ports.
"From there, we will conduct regular, on-site enforcement
programs to prevent illegal fees from creeping in again," he
said, adding that the government would also review the relevant
investment laws to cut the time needed to set up a business from
158 days to 30 days.