Govt urged to focus on economic issues at APEC

Adianto P.Simamora, The Jakarta Post, Jakarta

The government should take advantage of this week's Asia Pacific Economic Cooperation (APEC) gathering in Shanghai to help rebuild foreign investors' confidence in the ailing economy, economists said.

Sri Adiningsih of Gadjah Mada University said on Tuesday that the government should explain to the international community the various economic policies being taken to rehabilitate the economy, and measures to guarantee a stable security and political condition.

"The government should use this opportunity to explain its economic policies and the real situation in Indonesia to APEC members," Sri told The Jakarta Post.

Sri said that the APEC economies are both potential investors and markets for the Indonesian economy.

Top officials of the 21-member nations of APEC will meet on Oct. 20-21 in the industrial and trade center of China to further discuss efforts to speed up the trade and investment liberalization agenda agreed under the so-named Bogor goals.

The Bogor goals, named after the Indonesian hill resort where APEC leaders met in 1994, commit the 21 APEC economies to free trade and investment in the Asia Pacific region by 2010 for developed countries, and by 2020 for developing countries.

But there have been fears that the U.S. would try to drive the APEC leaders to be more focused on efforts to fight terrorism.

President Megawati Soekarnoputri will take part in this meeting.

"Indonesia needs international support to put the economy back on its feet again," Sri said.

Foreign investors have been discouraged from entering the country due to a combination of domestic security and economic problems.

The grim world economic outlook is also creating new uncertainty for the prospects of the country's economic recovery process.

While the government has forecast that the economy would grow by 3.5 percent this year and 4 percent next year, some analysts doubt this, as the world economic slump will hit hard the country's export sector.

But Finance Minister Boediono said on Tuesday that Indonesia's economy should be less vulnerable to the world economic slowdown as the country's non-oil and gas export products were basically lower valued-added products, such as agricultural commodities.

Boediono was also confident that domestic consumption would help the economy to grow by 4 percent next year, as targeted by the government.

Meanwhile, Pande Raja Silalahi, economist of the Centre for Strategic and International Studies (CSIS) expressed concern that the APEC gathering would be more focused on the political issue of the fight against global terrorism following the Sept.11 terrorist attacks on the U.S.

Pande called on the government to avoid being absorbed by sensitive political issues, and to focus its attention on the economic ones.