Bogor (TheInsiderStories) – National development Pplanning minister sees Indonesia’ economic growth rate will stagnate at the level of 5.3 percent in this year over the investment, exports and import development until June. Beside, Bambang Brodjonegoro rated the regulatory uncertainty and bureaucratic hinder the investment flows.
“We conducted a study in 2019 and sees our optimal growth rate is only 5.3 percent. Its very difficult to grow above 5.3 percent,” he said after the plenary meeting at the Bogor Presidential Palace, on Monday (07/08).
According to Brodjonegoro, the regulatory uncertainty can be seen in the complicated and long-term export procedures with an average time of 4.5 days. This procedure is higher than the neighboring countries like Singapore which are half a day also Vietnam and Thailand which are around 2 days.
Moreover, he added, the government bureaucracy is still considered not reliable enough to facilitate investment and launch in the trade sector. In the investment sector, Indonesia is still having difficulty to implementing the Ease of Doing Business (EoDB), while its investment costs are relatively high.
To start investing in Indonesia, it takes an average of around 19 days. This is also still far above the neighboring countries whose very fast in its procedures.
To achieve the higher growth, which is 5.4 percent per year, the government needs to make a breakthrough and focus on regulating regulations and specifically on regulations that are considered to inhibit investment and trade, both exports and imports, said the minister.
Brodjonegoro stressed, in the Medium Term Development Plan he offered three scenarios for the economic growth rate in the next five years, 5.4 percent for the basic scenario, 5.7 percent for the moderate and 6.0 percent for the optimistic scenario.
“Our records are longer than that of neighboring countries, proving that in terms of competitiveness Indonesia must struggle from lagging with neighboring countries by implementing the regulation in the field,” he said.
While in the human resources sector, he noted that the key factors to drive the economic growth are education and health. If we want to maintain productivity, primary and secondary education must be addressed by focusing on pisa scores, namely mathematics and language, so that Indonesia can be equivalent to neighboring countries.
“Being health is about the problem of stunting and maternal death, so when talking about human resources it is not just a matter of advocacy but a basic problem,” he said.
While, Finance Minister Sri Mulyani Indrawati also stressed that in order to drive the economic growth, Indonesia must first be able to deal with the problem of the weakening of the trade balance. Because, she rated, that the weakening export and import contribute significantly to the economic thrust.
“This required the attention of all ministries and institutions, spurring trade, especially exports and imports, and still being awakened. And if it is intensive, how do we provide convenience in processes such as getting land and others,” she said.
Therefore, the minister asked all the cabinet to look in detail at each commodity that would be exported or imported, the destination country, in order to produce the right policy.
“We see for oil and gas, until the first semester the production of lifting is below the initial assumption and decreases. It happens that oil from our revenues from the oil and gas side has decreased but needs have increased, ” she concluded.
On the other hand, Indrawati opined that the US dollar rate and world oil prices were also lower than expected. While domestic fuel demand continues to rise.
The former leader of the World Bank also stated that currently needed new oil and gas sources to meet the domestic oil and gas needs, including upstream strategies to find new wells, produce more oil and gas supplies. Its also aimed to lowering the current account deficit.
In the plenary cabinet meeting, President Joko Widodo alluded to a decline in exports by 8.6 percent and imports down by 9.2 percent. Therefore, Indonesia experienced a trade balance deficit of US$2.4 billion until May 2019.
He even warned the Minister of Energy and Mineral Resources and the Minister of State-Owned Enterprises regarding the high oil and gas imports. The Statistic Indonesia noted, the oil and gas trade balance deficit reached $3.74 billion.
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