Staunch critic questions govt capacity to deliver growth

The Jakarta Post, Jakarta

Indonesia's economy would be poised for higher economic growth this year were it not for inability of the government of President Susilo Bambang Yudhoyono to deliver, according to a staunch critic of the government.

Rizal Ramli, chief economics minister under president Abdurrahman Wahid, says he expects the economy to grow marginally closer to 6 percent in 2007 from 5.5 or 5.6 percent in 2006.

His prediction is lower than the 6.3 percent the government has targeted for growth in national gross domestic product this year.

"The potential to make things a lot better are there," Rizal told a discussion on the prospects for 2007 organized by Globe Asia, a new business magazine, on Monday.

He specifically said that there was still room for Bank Indonesia, the central bank, to cut interest rates to help spur corporate borrowing, and for the government to get its act together by stabilizing the prices of basic commodities.

The middle class in Indonesia, he said, had been hurt by the price volatility of the past year. If the government could bring prices under control, it would give people spare money to spend on secondary commodities.

Rizal said that while there had been a lot of good statements emanating from the government, it had fallen short on delivery.

"There will be some improvement, but not that significant," he said during a discussion with media figures.

He based his analysis on the government's record last year, when, he said, fiscal and monetary policies had contradicted each other to the point of reducing the economic growth rate by between 0.5 and 1.0 percent.

He said that while a 6.0 percent growth rate may look impressive by Latin American or developed countries' standards, it paled in comparison to the growth rates enjoyed by many other Asian countries, such as China, India and Vietnam.

"We are in East Asia, where everybody is running faster," he said.

Rizal is also the executive chairman of Globe Asia, which is part of the Investor Group. The magazine, to be officially launched Wednesday, claims to be the first English-language business publication in Indonesia.

It aims to cater to the growing need for information about the business and entrepreneurship sectors here, according to Shoeb Kagda, the associate publisher, who helped put together the magazine.
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