Against the backdrop of the global economic crisis, Indonesia has shifted focus from achieving the highest growth possible to shielding people from negative impacts, President Susilo Bambang Yudhoyono says.
“The right, and realistic theme for these two years is [economic] recovery. It is not about achieving the highest [economic] growth possible, but protecting the people from the impact of the [global economic] crisis,” the President said on Tuesday.
He was opening the 2009 National Development Planning Meeting (Musrembang) in Jakarta.
Musrembang is designed to guide local government leaders in drafting their 2010 budget in line with central government expectations. For 2010, the government has set the theme:
We have plans: Finance Minister Sri Mulyani Indrawati (left) and State Minister of National Development Planning Paskah Suzetta (center) and Home Minister Mardiyanto share the stage during the opening of the 2009 National Development Planning Meeting in Jakarta. The event, which provides a starting point for the drafting of 2010 state budget, lasts until Friday. (JP/Ricky Yudhistira)
“Recovering the national economy and maintaining people’s prosperity”.
“Our hope is that in 2011 the world economy will have fully recovered, although we will be able to minimize the impact of the crisis locally,” he added.
Finance Minister Sri Mulyani Indrawati said the government wanted to achieve economic growth of between 5 percent and 6 percent in 2010, up from a forecast of between 4 percent and 4.5 percent this year.
Yudhoyono said both the central and local governments should focus on seven priorities to protect people from the negative impacts of the crisis. These priorities included preventing unemployment, protecting the real sector, reducing inflation, increasing people’s purchasing power and stabilizing the prices of food and energy.
According to the Manpower and Transmigration Ministry, 51,000 workers have been laid off this year as businesses were hit by the global financial crisis.
“The latest report we received showed 51,000 people had been laid off. But we immediately tried to shift them to other professions,” said Manpower and Transmigration Minister Erman Suparno, without elaborating.
Until April, government spending remained low, with only 21 percent of the full-year budget disbursed, which analysts said might deprive the country of the timely positive impact of the state budget and stimulus to counter the downturn.
Yudhoyono urged local governments to spend money on productive means to spur economic growth especially in the regions.
“Our main steps should be: Focusing on the seven priorities, and designing accurate budgets.
If these can be done, God willing, our dream will become reality; we can be a developed country,” he said.
State Minister for National Development Planning Paskah Suzetta said optimizing budget expenduiture would be the most important thing for these two years to cushion the impact of the global crisis.
“It is not easy to achieve a 4.5 percent growth (this year) while the world economy is having negative growth ... 2010 may be a tough year too,” said Mulyani.
The government may provide a stimulus of up to Rp 6.1 trillion (US$583.3 milion) from part of unallocated funds in the planned 2010 state budget, said Mulyani.
The figure is much lower than the Rp 73.3 trillion stimulus budget package allocated this year.
Govt’s seven priorities:
1. Preventing massive layoffs
2. Protecting the real sector
3. Reducing inflation
4. Increasing people’s purchasing power
5. Protecting poor people
6. Stabilizing the price of food and energy
7. Maintaining 2009 growth at 4.5%
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