Sun, 21 Nov 2010

Jakarta (ANTARA News) - Indonesia hopes the current foreign capital inflows could be used to help the country`s economy.

"The government welcomes the capital inflows to Indonesia and we will direct them to productive sectors to help grow the economy," Finance Minister Agus Martowardoyo said here on Friday.

He said the government hoped the funds that came into the country were not speculative but mid-and long-term funds.

"Surely we hope the funds that come into Indonesia are mid-and long-term funds," he said.

He said it would be better if the funds would not only go to the capital market but to particularly the real sector so that they would bring a very productive benefit.

"We have been discussing a lot and the funds could be directed towards productive sectors so that they would not only go the capital market and we hope more state-owned companies would go public or increase their capitals through a right issue to improve investment and infrastructure," he said.

The minister however said that the government had not yet prepared instruments to make the capitals to remain in Indonesia while the economy in the US and Europe is slowing down.

"We have been discussing this but no concrete steps have been taken," he said.
Coordinating minister for economic affairs Hatta Radjasa meanwhile said he was not worried if a sudden reversal would later occur when the economy in the US and Europe was improving citing the country`s strong economic fundamentals.

"When the economy in the US and Europe is improving I am not worried if a reversal would take place because Indonesia`s economy is good. Indonesia has never conducted debt restructuring. Investors view Indonesia is a good country," he said.

Hatta said more optimum efforts need to be taken to manage the funds, especially to direct them to the productive sector.

"Indeed we have to be smart and creative with regard to directing them to infrastructure projects. Unless we are smart we will lose the opportunity," he said.