Kadin still broadly supportive of economic team

Kadin still broadly supportive of economic team

President Susilo Bambang Yudhoyono is expected to reshuffle his
Cabinet after serving for one year. Now there are strong public
demands for the President to replace the Cabinet's economic team
that is led by the Coordinating Minister for the Economy Aburizal
Bakrie. The Jakarta Post's Rendi A. Witular talked with Chamber
of Commerce and Industry (Kadin) chairman Mohamad S. Hidayat
about the issue. The following is an excerpt from the
conversation:

Question: How do you see the performance of the economic team so
far?

Answer: Frankly speaking, this year has not been an easy time
for the team as it has faced big external problems ranging from
natural disasters such as earthquakes and tsunami, avian
influenza outbreaks, high oil prices and the second terrorist
attacks on the resort island of Bali.

The team spent much of its valuable time coping with these
external factors. Consequently, it issued many "ad hoc" policies
to address these problems. Take the fuel subsidy cut for
instance; we fully support the government on this matter even
though we have to take the heat.

The policy is unavoidable and painful in the short run, but it
will have a positive impact in the long run for our state budget
and fundamental economy. The positive effects include a stronger
rupiah value against the U.S. dollar.

We understand that our government with the business community
are working hand-in-hand to improve our economy, and it has shown
positive results thus far.

In the second half of this year, investment is up 15 percent
and exports have increased by as much as 10 percent. We expect
economic growth this year to reach 5.7 percent despite the
psychological impact of the fuel price hike, the bird flu
outbreak and the Bali bombings.

The government is aiming to achieve an average economic growth
rate of 6.6 percent annually for the next five years with a total
US$426 billion worth of investment. However, this can only be
achieved through capital inflows into the real sector and a high-
level of export volume.

All these efforts will eventually lead to stronger foreign
exchange reserves, lower unemployment, and more vibrant small-
and medium- enterprises, which will drive our economic growth and
competitiveness in the global economy.

Kadin has voiced its full support, and actively participated
in the process of our national economic development. We have
submitted to the government a roadmap on how to boost investment
and trade in Indonesia.

Overall, your tone is fairly positive on the performance of
the government. Do you actually feel comfortable with the current
conditions?

In this regard, I would like to cover the facts equally
between being critical and supportive. We criticized the
government for its failure to be more efficient and more serious
in tackling smuggling and the classic problems of the high-cost
economy, including the high rate of terminal handling charges,
illegal retributions related to both the central government and
regional administrations, as well as problems in our tax regime.
This is just to name a few.

The only way to win investors' confidence to come to Indonesia
is by immediately taking necessary measures to address all of
these problems by lessening the scope of unnecessary and
unfriendly regulations, reducing tariffs and smoothing customs
bureaucracy, as well as improving law enforcement. These will be
part of our benchmark in evaluating the government's performance
in the future.

So what are your suggestions for the economic team?

Moving forward towards the remaining four years of the
administration, we would like to propose to the economic team to
plan and organize comprehensive policies with matrices, timelines
and progress charts in addressing all of the problems. This is to
clearly enable the public to evaluate the progress made by the
team as well as for the business community to see the direction
of economic reform more concretely.