Sjahrir says RI economy could grow by 6% this year

Sjahrir says RI economy could grow by 6% this year

JAKARTA (JP): Despite the bleak political environment,
Indonesia's economic growth this year could reach 6 percent as
the country's real economy has been growing rapidly during the
past few months, according to noted economist Sjahrir.

Sjahrir said here over the weekend that political fighting
among the elite may escalate, but real economic activities would
continue to blossom, and new businesses would continue to emerge
as there were no more barriers in sight.

"We all may say that Gus Dur (President Abdurrahman Wahid) is
a fool, but the economy can grow by 6 percent this year. That can
happen because the real economy is growing fast.

"It can be seen from the growing exports, the growing imports
and even from the growing businesses of Internet cafes. All real
businesses are growing," he said at a media education seminar
held by Astaga.com Internet company.

The real economy has been moving forward rapidly despite the
slow rebuilding of the country's banking industry. Companies and
the people will continue doing business, even though they have to
do it in cash, he said.

"The amount of money in circulation may not grow
significantly, but the velocity of money movement has been
increasingly getting faster and faster," he said.

Sjahrir noted that economic growth this year would be
especially driven by exports and imports, especially of capital
goods, expanding domestic consumption and the unprecedented rapid
growth of information technology-based businesses, including the
Internet.

According to the Central Bureau of Statistics, the value of
exports in the January-April period increased 35.93 percent to
US$19.10 billion over the same period last year. And imports
reached $8.85 billion, a 15.24 percent increase compared to the
same period last year.

Meanwhile, raw material imports in the January-March period
increased by 19.69 percent to $4.99 billion compared to the same
period last year. Imports of capital goods jumped by 21.36
percent during the period.

Sjahrir noted that the soaring exports, the expanding
importation of raw materials and capital goods indicated the
rapid growth of real economic activities in the country.

Meanwhile, domestic consumption had also grown rapidly after
one and a half years of the crisis, which started in July 1997.

And the growth of information technology-based businesses,
especially Internet businesses, has been astounding due to the
freedom given to investors to enter whatever new businesses they
want.

"Now we can establish whatever company we want without being
required to form a partnership with Mbak Tutut or Mbak Titik. If
we have money and want it, we can just start it," Sjahrir said,
referring to daughters of former president Soeharto.

"That's the benefits of reformasi (reform) that people often
forget," he said.

As those in the real sector can now do business freely without
much intervention from the government, any political movement in
the country does not greatly influence business activities.

A planned Cabinet reshuffle, or even bad policymaking by
certain departments or state institutions will not influence
economic activities.

"Whoever becomes the chairman of Bapepam (the Capital Market
Supervisory Agency), whoever becomes the finance minister, that
doesn't matter at all for the real economy. That's totally
irrelevant to the real economy ... All economic activities will
continue going," he said.

However, Sjahrir warned that the real economy would continue
to grow and would not be affected by any political movement as
long as "Indonesia does not return to being a military regime".

"Once we return to being a military regime, we will all die,"
he said. (rid)