Indonesia to recover faster after August special session: Ramli
Indonesia to recover faster after August special session: Ramli
KUALA LUMPUR (AFP): Indonesia's economy will recover faster after Aug. 1 whatever the outcome of a parliamentary session which could impeach the president, Finance Minister Rizal Ramli said Wednesday.
Ramli warned however that Indonesia's budget deficit this year could balloon to 6 percent of gross domestic product (GDP), from 3.7 percent in 2000, amid a weakening rupiah and rising interest rates.
He said tax enforcement and privatization would be speeded up.
Speaking at an economic conference, Ramli said there was still a chance of "political compromise" at the August parliamentary session but did not elaborate.
"After August there will be a political resolution whatever the outcome...the speed of recovery and stability will be expedited," he said.
The session will demand President Abdurrahman Wahid account for his rule and answer allegations of involvement in two financial scandals.
A rejection of his account would end Wahid's tenure as the country's first freely-elected president.
Wahid, who has denied any wrongdoing and vowed to serve out his term until 2004, warned Wednesday he was ready to declare a state of emergency and call in the military to save his presidency.
Ramli said the budget deficit rises by RP 8 trillion to Rp 9 trillion (US$708 million-$796 million) with a depreciation of Rp 1,000 to the dollar, and by another RP 2.3 trillion with a 1 percent increase in interest rates.
The deficit could therefore balloon to 6 percent of GDP but Rizal said the government would be "more conservative" and aimed to contain it at last year's level of 3.7 percent.
He said tax enforcement among richer citizens would be stepped up, with four cases of tax evasion to be brought to court next week.
The government, which now controls about 80 percent of economic assets, would also carry out a backlog of privatizations.
Rizal said negative perceptions about Indonesia were "mostly based on opinions rather than facts."
He said Indonesia had gone through a democratic transition after president Soeharto's fall in 1998, had decentralized decision-making and was now in economic recovery.
"We are moving in the right direction, although I am not happy with the speed. We are hindered by political uncertainty but we are determined to move it forward quicker than expected," he added.