Realization of economic growth in 2012 last was satisfactorily attained,
i.e. 6.23%, below its ideal level at 6.5% as expected. Somehow it was quite a
relief because it was still not below 6%.
Domestic consumption was again the main contributor, sharing about 55%
followed by formation of gross fixed capital [PMTB] of physical investment of
around 33%. Next was contributed by Government spending around 9%; not bad,
because the percentage was growing.
The disheartening thing was outnumbered by import [25%] which caused
deficit in trade transaction. This was a tragedy because in the previous years
the score was surplus. It seemed reasonable that the Government must think hard
to jack up growth from the export and investment side.
Lately, the Government again paid greater attention to the global crisis
which was beginning to suppress domestic economy. Two facades which were the
focus of Government’s attention was to jack up investment and export
performance. The seriousness was implemented by formation of the National Team
for Export Promotion and Investment [PEPI] personally commanded by Presiden
Susilo Bambang Yudhoyono.
This serious attention was reasonable because according to the Central Board
of Statistics the GDP the amount used for buying export component according to
the applicable price – was only posted at 24.26%; on the contrary import was
higher, i.e. 25.81% which caused deficit to happened.
Meanwhile expenditure for household consumption was posted at 54.56%,
component of Government consumption expenditure 8.89%, and component of gross
fixed capital formation or physical investment 33.16%. in 2012 Indonesia’s GDP
based on applicable price was posted at Rp8,241 trillion, whilst on constant
price basis [year 2000] was Rp2,618,1 trillion. For comparison, Indonesia’s GDP
2011 based on applicable price was Rp7, 427.1 trillion, and based on constant
price [year 2000] was Rp2, 463.2 trillion.
Under the circumstances the Government had formed the national PEPI team
led by President Susilo Bambang Yudhoyono with the Coordinating Minister of
Economy as executive. The Government would also set up a Secretariat to foster
teamwork. The special team for Export Promotion and investment would be supported
by ministrial unit to enhance task execution.
This team, in the coordination meeting would dissect promotion of export
and investment, to analyze problem and to recommend strategic steps in relation
to export and investment. Export problems in the regions would be detected
while the Government would Regional PEPI [PEPIDA].
Evaluation of the Investment Negative List [DNI] which was in Indonesia
would be part of the task to be carried out by PEPI team. This was done to
enhance investment climate in Indonesia. Head of the Coordinating Board of
Investment [BPKM], Chatib Basri stated that revision of DNI was necessary to
strengthen national competitiveness and create better investment climate so the
target of Rp 300 trillion investments could be met.
Head of BKPM confirmed that revision of DNI was exercised while
protecting national interest, especially for the small-and-medium business
[UKM] so they would be able to complete against foreign businesspeople and
investors. The entry of foreigners to Indonesia did not mean that there was no
room for Indonesian businesspeople to develop.
The national PEPI team was expected to spur on export and domestic
investment. The point was that on the export side, the biggest problem was
readiness of the alternative market which was not sizable enough and therefore
unable to cushion deficit in trade balance and to increase export. To solve the
problem, the team must be able to solve the problem by seeking alternative
markets beyond the traditional export market.
On the other hand, today investment was showing improvement in tandem
with bettered global economy. However, in regard to quality improvement of
economic growth, the PEP team must be able to direct investment to productive
sectors as the multiplier effect was notably great. The team must be able to
bring investment into the tradable sector.
In spite of cynical remarks about the national PEPI team led by
President SBY which was regarded as unnecessary although it was substantially
important the team must be able to eliminate the doubt. As know there were some
circles who feared that PEPI which was meant to jack up export and national
investment might frictions at ministrial level. Questions arose: was the
formation of PEPI caused by discontent of Ministry’s performance so the focus
was vague? Moreover toward the General
Election, the cabinet tends to be losing compactness.
In order to jack up export and promote investment, in fact in was enough
to foster coordination under the Coordinating Minister of Economy. There were
also who rated that the function of PEPI was inefficient and costly. So it
should be better to maximize the function of the existing instruments because
the ministers were supposed to have fully understood their respective roles.
On the contracy there were those who believed that the PEPI team was the
right thing as a measure to invigorate investment and export. The slowdown of
economic growth in 2012 was among others on account of lowered national export.
On the other hand investment policy at central level and regional level seemed
no to be in synchronous.
About export, the effort to promote was not a simple matter because
basically Indonesia’s export highly depended on buyer countries especially
European states and the USA, while economic crisis in those two countries
seemed unending. It became in-dispensable to seek for new export market beside
Europe and the USA.
To promote export it was necessary to uplift production in terms of
quality as well as quantity which was also necessary to be supported by sound
infra structure such as toll roads to transport export commodities to harbors
in the main cities like Jakarta. The traffic jams in Jakarta could hindrance
export process. Queue in harbors is among the problems to be cracked.
Meanwhile in 2015 next the ASEAN Community would be underway which means
competition in international trading would heighten. Unfortunately Indonesia
seemed not too ready for the competition compared to other ASEAN states. About
investment, it seemed that this year there was potential slowdown especially in
the real sector due to high minimum provincial wages [UMP] and residential
minimum wages [UMK].
The notably high UMP in Jakarta, Bogor and Bekasi made investors
hesitate to enter, and yet low wages used to be the reason for investors to
enter. The policy in the provinces in determining UMK seemed not synchronous
with the investment promotion plan. So the Government was expected to reform to
make everyone happy in the spirit on Win-Win Solution.
Not less important was that the
presence of PEPI did not have to disregard the role of the existing
institutions. Previously there was already the National Export Development
Board [BPEN] and the Coordinating Board of Investment [BKPM]. If any new team
was formed they should coordinate effectively with the existing bodies. In case
of failure in making coordination, anxiety of certain circles could be true
that the formation of a new team would but cause inefficiency. Hopefully this
was not true. (SS).
Business News - February 22,2013
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