Sakakibara urges RI to revive role in region's economy
Wahyoe Boediwardhana The Jakarta Post Nusa Dua, Bali
Former Japanese top financial diplomat Eisuke Sakakibara said on Sunday that with the late 1990s financial crisis already passed away, the country should put its best efforts to regain its former economic stature.
"Indonesian financial crisis is over. Now it is a time (for Indonesia) to play its important role in the South East Asia region, (a role) it played prior to the crisis," he said in a speech delivered at a three-day investment conference here.
Sakakibara, known as "Mr. Yen" for his influence over currency markets when he was vice finance minister during the late 1990s, said that promoting technologically-advanced industry was one of the main engines that could propel Indonesia back into its position as one of Asia's influential economic actor.
He also urged Indonesia to boost economic and trade cooperation with China, which is becoming Asia's new economic giant.
"We should not be afraid (of China). We should, instead, maintain and develop our technology capability and at the same time incessantly looking for things which we could learn from China (experiences and achievements)," he said.
Sakakibara also urged Indonesia to play an active role in establishing a trade network that would link the countries in Asia region. The proposed network, he stressed, should not be obstructed by any trade barriers.
The international conference was opened by President Megawati Soekarnoputri on Sunday.
Indonesia was badly hit by the financial crisis that started in the middle of 1997, which sent the rupiah to all time lows, boosted inflation, crippled the banking sector, and caused the economy to contract by more than 13 percent in 1998. Although macroeconomic stability has returned and banks have started to recover, the country's economy has only grown by between 3-4 percent during the past couple of years.
Prior to the crisis, the economy could grow by between 6-7 percent when Indonesia was dubbed as one of the darlings of emerging markets. The current relatively low growth (driven by consumer spending) was mainly due to weak investment and export performance due to a number of lingering problems both at home and overseas.
Separately, the chairman of ASEAN Business Advisory Council Rudy Pesik said that Indonesian entrepreneurs had always been afraid to engage in a head-on competition with businesses from China mainly because of the latter's abundant resource of cheap labors and superior level of technology.
"Instead of being paralyzed by the fear, we should try to find out what does China lack of. It is simply impossible for any nation to produce everything and anything it needs. We should concentrate on those products that China needs but does not produce," he said.
While lending his support to Sakakibara's statement, Frans Seda, a senior economic adviser of President Megawati, reminded that to be able to regain it's former economic stature, the country's macro-economic stability should go hand in hand with the promotion of micro-economic stability.
"This (micro-economic stability) can be achieved by making it easier for investors to invest in this country. Increased investment will decrease unemployment and poverty rates," he said.
Currently, there were many dormant domestic investors, while the foreign investors were still mostly in a wait and see attitude.
"Actually, it is our own government that is unprepared for this. The government should keep improving the domestic investment stability," he said.