President Susilo Bambang Yudhoyono has hinted the economy will rely more on stronger domestic consumption than on exports in his second term in office
resident Susilo Bambang Yudhoyono has hinted the economy will rely more on stronger domestic consumption than on exports in his second term in office.
In his annual state of the nation address Friday, the last of his first five-year term, Yudhoyono vowed to strengthen the people's purchasing power.
"It's the domestic market, not the export market, that currently offers the most viable opportunities," he said.
"In the future, we need to strengthen our domestic economy and domestic market, and not rely too heavily on exports as our main source of growth."
In his five years at the helm of the country, Yudhoyono said, the government had succeeded in reducing unemployment from 9.9 percent in 2004 to 8.1 percent in February 2009.
He also said the poverty rate had dropped under his leadership, from 16.7 percent of the total population of 226 million in 2004, to 14.1 percent in March 2009.
"We need to continue to improve the people's welfare through productive economic development *programs*," he said.
"Our goal is to reduce the poverty and unemployment rates and to improve *public* services, mainly education and health, to improve the people's welfare."
The economy grew by 5.13 percent in 2004 from a year earlier and continued to expand by 6.3 percent in 2007, according to the Central Statistics Agency (BPS).
Last year, it grew by 6.1 percent, making Indonesia one of the only four countries in the world to post positive growth in 2008 amid the global economic downturn.
But despite the current government's track record, the House has derided its ambitious target of creating 3 million new jobs next year as proposed in the draft 2010 state budget bill.
"The *government's* target to create 3 million jobs in 2010 is unrealistic if economic growth of more than 5 percent can't be attained," said House Speaker Agung Laksono, in his opening speech.
In its proposed 2010 state budget, the government forecasts the economy will expand by up to 5 percent in 2010.
"The government must keep its focus on this targeted creation of new jobs, particularly in view of the decreasing number of job opportunities along with the free market mechanism in the service sector," Agung said.
He added the government's efforts in lowering the central bank's key interest rate had proved fruitless, with lending rates still prohibitively high.
"Despite optimism prevailing in certain circles, in reality, the Bank Indonesia rate, which is currently at 6.5 percent, has not affected bank loan interest rates, which are still above 12 percent," Agung said.
Indonesian Chamber of Commerce and Industry chairman M.S. Hidayat also played down the government's aim to create new jobs if the economic growth target for next year was set at a modest 5 percent.
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