Observers question economic team`s success claims

Jakarta (Antara News) - Tim Indonesia Bangkit (TIB), a private economic research group, has questioned the claims of success made by President Susilo Bambang Yudhoyono`s economic team.

"There is a tendency on the part of the government`s economic team to claim successes in improving the national economy," Imam Sugema, a TIB economic observer, said here Wednesday.

Noting that one of the economic team`s claims referred to the occurrence of deflation in April, Imam said what had happened was actually the market correcting the inflation that had prevailed before.

While inflation was initially caused by a sharp increase in rice prices, it was only logical that the market operations the government conducted to check the rice price spiral and the grand rice harvest were followed by deflation in April, he said.

About the claim of rising exports, Iman said the development should have happened in conjunction with a significant increase in job opportunities but this did not occur.

What happened in relation with rising exports was a switching in supply where goods intended for domestic consumption were instead supplied to the world market. This was evident in the case of crude palm-oil (CPO) and cooking oil, he said.

"If we can increase production, it should benefit the domestic market," Imam added.

Meanwhile, Binny Buchori, executive director of Perkumpulan Prakarsa (Association of Initiatives), said the problems being faced by the nation in education and health were now worse than ever before.

If the government had the courage to let the State Budget suffer a deficit of five to six percent to improve education and health services, the problems would be solved, he said.

The government should clarify what was preventing it from allocating more funds for the development of infrastructure in education and health, according to Binny.

Binny also regretted the government`s plan to seek foreign loans again after it had dissolved the Consultative Group on Indonesia (CGI).

Ichsanuddin Noorsy, another economic observer, posed the question whether with the inflation rate now recorded at 6.5 percent, the real sector was already being revived.

He also noted discord between the president and vice president in viewing the country`s economic problems. The vice president was blaming the banking world for the stagnation in the real sector while the president was supporting the banking sector by his call on banks not to listen to parties who did not follow business logic.(*)
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