Indonesia’s trade
performance worsened time after time, as seen in current transaction which
remained in deficit. In Q II/2015 deficit was up to become USD 4.5 billion (2.1
%of GDP) against previous quarter at 3.8 billion (1.8% of GDP). Vice Chairman
of Commission VI of House Heri Gunawan stated that swelling deficit was only
stopped by reduced importing against reduced export. Investment flow was
constantly in deficit due to massive money borrowing from overseas resources by
corporate and increased private overseas deposit causing capital transaction to
drop.
The result was that surplus of
existing capital and financial was unable to close deficit in balance of
payment at USD 2.9 billion in Q II/2015.
Under such circumstances forex
reserves was vulnerable and constantly eroded as the Government had to pay
overseas debt in no ignorable amount. Until Q II/2015 the total overseas debt due
had swollen to USD 304.3 billion, consisting of debt of the public sector USD
134.6 billion (44.2 % of total debt) and debt of the private sector USD 169.7
billion (55.8%) of total debt.
Deficit was a strong signal of ̋crisis
̋, and it was more than just fear but real and tangible threat as proven by
disheartening export performance and low investment. It was not surprising that
the Minister of Trade called a number of officials at the International Trade
Center (ITPC). It was very likely to happen to consider that export of non oil-gas
commodities to same countries dropped alarmingly. Export to the USA inched down
by 0.4%, to Japan 8% and China dropped by 13.3 and remember that those
countries were Indonesia’s main export destination countries with sizable
market share of 30.8%.
He underscored once again that
export to those countries affected national economy significantly. Moreover
recently China as one of Indonesia’s 3 main export destinations devaluated
their Yuan. It was a rational way to increase their export and must be
responded the rational way too by pragmatism with the spirit of being on the
side of domestic interest.
According to Heri Gunawan, the
Ministry of Trade and the Ministry of Industry must coordinate actively to
increase performance and to be pro-market as growth propeller if economy. Government
not being Serious.
Meanwhile member of House Jazilul
Fawaid rated that the Government was not serious in anticipating weakening of
Rupiah against USD and in dealing with global economy recovery. Such was under scored
during meeting with Government’s representative in Parliament, The Government
had failed to anticipate fall of Rupiah to as low as Rp.14.000 per USD and
Government also failed to predict devaluation of Yuan by China. Now the
Government was urged to find a way out.
In the future the Government was
expected to anticipate problems instead of waiting till it go too late. Now it
was not anticipation which was needed but act of emergency. It was advisable
for the Government to call national businesspeople and seek for solutions.
Heri Gunawan highlighted fund
transferred to the regions amounting to Rp.782.2 trillion which was bigger than
Government’s expenditure. It was expected that the fund would reach the provinces
soon. The Government and House could instruct the regions but did the local
Government had the ability to execute budget or not?
If the provinces had no capability
to execute budget, high amount of would stay idle in local banks the way it was
happening now. The Government wished to accelerate even distribution on development
but what happed was the reverse. Although the Government tried to make
breakthrough, without support of competent leadership in the regions nothing
would change.
In principle the Government
supported transfer of money to the regions, but the problem was shortage of strong
leadership in the provinces. The singer not the song Managerial competence was
needed to keep things running. (SS)
Business New - September 2, 2015
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