International
Indonesia Today
Thursday, September 29, 2011
7
RI economy not much affected by European crisis Antara
JAKARTA - Indonesia`s economy is currently in stable condition and not too much affected by the impact of the financial crisis in Europe, an analyst said. “The Indonesian economy is not very much affected because it is still supported by a large domestic market with the non-tradeable sector serving as the engineer,” economic analyst Telisa Felianty said in a presentation here Tuesday. Telisa said growth of labor productivity in Indonesia was in-
creasing, the demographic bonus was also helping the economy to remain safe. Besides the economy was also being supported by the limited exports of Indonesian goods to Europe so that the crisis there did not have a direct effect on Indonesia. “The share of Indonesian exports
in the Eurozone is only 10 percent because Europe is not a major destination for Indonesian exports. Indonesians should not be pessimistic because of the financial crisis in Europe,” Telisa said. But she also said Indonesia`s exports could be influenced by the crisis if China as one of Indonesia`s major trading partners was directly affected by the European financial crisis. However, Telisa estimated that the financial markets could be directly affected by the crisis
because of the interaction mechanism based on the global markets could affect domestic transactions as a whole. “This could pose an immediate impact because the crisis can make investors to remove their foreign capital portfolio ownership in developing countries such as Indonesia,” she said. Telisa suggested that Indonesia maintained and enhance the momentum of economic growth, implementing regulatory and supervision, strengthen early warning
systems, improve discipline and increase the fiscal space to maintain the fundamental as well as finding export market opportunities. Inter-connectivity development acceleration is also required to connect Indonesian islands and reduce the high costs, maintain exports and protect domestic markets and also anticipate the immediate impact of increasingly rapid imports. “Therefore, the growth based on `endogenous growth` needs to be maintained and enhanced,” she said.
Infrastructures need more funds for economic expansion Antara
AP Photo/Heri Juanda
Acehnese youth compete during a traditional horse race at Belang Bebangka, Aceh province, Indonesia, Sunday, Sept. 25, 2011.
RI hoping no country to accept illegally logged wood Antara
JAKARTA - Indonesia is hoping no country in the world will buy or sell wood or products made of wood obtained through illegal logging , a minister said. Forestry Minister Zulkifli Hasan said here on Tuesday Indonesia was hoping other countries would support its efforts in fighting illegal logging and protecting its rainforests by not allowing illegal wood to enter their territories. “The Indonesian government knows no compromise in dealing with illegal logging but for for fairness`s sake, advanced countries should also not buy or accept wood from illegal logging. It would really be ironical, if , while Indonesia is fighting illegal logging, our foreign friends accept the products of illegal logging. Therefore, we are cooperating with CIFOR, donors and other related parties ro with regard to certification of the legality
of traded wood ,” he said. Zulkifli referred to the case of “Merbau” wood as an example which was only produced and existed in Indonesia and therefore it was not impossible that it comes from other countries. “It can be ascertained that Merbau wood always comes from us. So it is impossible for it to come from Malaysia, Singapore or China. So there must be no more Merbau wood stockpiled in the European market for example. We will fight illegal logging but we also ask friendly countries not to accept `log and laundry`, “ he said. The minister also said that besides the certification program Indonesia has also taken a number of decisions including a moratorium on forest clearing and mapping of forests affected by the regulation. “The forestry minister has issued a map of regions which may not be disturbed, namely a moratorium. We have the map covering 27 mil-
lion hectares called primary forests and peat land,” he said. He said the forests are found in Kalimantan and Papua. The government, he said, has also launched a one-billion tree planting program since 2010 which has now been realized until 1.5 billion trees. In 2011 the target is one billion trees but it is expected to reach two billions, he said. President Susilo Bambang Yudhoyono here on Tuesday morning opened an international seminar on future Indonesian forests where he was also one of the key speakers. The President said this meeting was very important and provided an opportunity for Indonesia to meet the national target in the reduction of gas emissions in the next few years and in protecting its rainforests. “The theme of the meeting is correct and relevant. Forest problems are strongly linked with Indonesia`s interest in assuring the sustainability of its forests,” he said.
JAKARTA - Despite President Susilo Bambang Yudhoyono`s efforts over the past two years to increase the state budget allocation for infrastructure development, many quarters have assssed the amounts so far to be too small for accelerating economic development. According to a World Bank economist, Indonesia has to increase its budget allocation if it wants to achieve the goals of its economic development as outlined in its master plan. World Bank trade economist Henry Sandee said recently that so far Indonesia had allocated only a small amount of funds for the development of its infrastructures. In the last ten years, the allocation for infrastructure was only about two to three percent, yet now there has been an improvement as it has been increased to 19.3 percent, he said. Actually, in the last two years, President Yudhoyono had always promised to focus on infrastructure in order to boost the country`s economic development. The budget for infrastructure in 2011 was raised from Rp108 trillion in 2010 to RP126 trillion in 2011. “We are going to focus the budget on development of good quality infrastructure facilities in our efforts to improve the pace of economic development,” President Susilo Bambang Yudhoyono said when he delivered the government`s financial note and the 2011 draft State Budget (APBN) in August 2010. In the meantime, when he delivered the 2012 draft state budget last August, President Yudhoyono said the government had set Rp168.1 trillion in the 2012 Draft State Budget for the development of infrastructures, including energy, food resilience and communications infrastructure. He said that in the 2012 draft state budget the allocation for capi-
tal expenditure was set at Rp168.1 trillion, up Rp27.2 trillion or 19.3 percent from the 2011 revised state budget. According to the World Bank`s trade economist, there has been an increase, yet it is not enough for accelerating economic development. “There has been an improvement because capital expenditure for infrastructures has increased 19.3 percent, but if it is willing to achieve its MP3EI (Master Plan for Acceleration of Indonesia`s Development and Economic Expansion) target, it should increase further the allocation,” Henry Sandee said. The funds Indonesia allocates for infrastructure development, including those for 2012 which stand at Rp168.1 trillion, are still small, Henry said. The budget for infrastructure development in advanced countries like Germany usually accounts for seven to eight percent of their Gross Domestic Product (GDP), Henry Sandee. He said Indonesia`s fund allocations for the infrastructure sector in the last ten years only account for about two to three percent of its GDP. Indonesia`s total GDP IN 2010 was recorded at Rp6,422 trillion while its allocation for infrastructures was only Rp134.61 trillion or only about 2.09 percent of its GDP. One of the strategy to achieve the MP3I target, according to the WB, is to cut logistics funds which at present reached 20 percent of the total operational and production costs. The MP3I goals included an effort to include Indonesia among the world`s big ten economies with a gross domestic product of US4.5 trillion and a per capita income of US$15,000. Indonesia is currently included in the world`s big 17 economies with a per capita income of US$3,000. Besides small budget, the government is also slow in absorbing budget for the development of infrastructure.