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Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

07 December 2009

Analysts Warn Political Impacts on the Economy

tempointeractive, 7 December 2009

Economists began to cast their warning over the possible negative impacts of domestic political turmoil on the economic projections next year as the anti-corruption protests which also target President Susilo Bambang have not shown signs of receeding.

Mirza Adityaswara head of the Economist of Bank Indonesia said on Monday (7/12) political situations in the country pose about 60 percent of influences on the economy, and predicted that first quarter growth will slip down to around 4 percent if the political stuations remain.

Mirza also said that credit growth is expected around 10 percent at the end of the year of the 15 percent target, and will grow to arund 15 percent next year of the projected 20 – 25 percent.

Another analyst with brokerage firm Samuel Sekuritas Indonesia, Lana Soelistiangningsih said President Yudhoyono's statement on a political plot against his government will throw the market into anxiety. “This could swerve the market sentiment from neutral to anxious. The statements have confirm a possiblie fragile political situation.”

Source: tempointeractive

News Focus: Observers Pessimistic About House Inquiry Committee

ANTARA News, 7 December 2009

The House Special Inquiry Committee that will investigate a controversial Rp6.7 trillion bailout provided by the government for Bank Century might not work maximally, observers say. Most of the lawmakers grouped in the 30-member inquiry committee came from political parties which have signed political contracts of support with the government. After all, the political parties are involved in cartel politics that enabled them to seek and provide mutual protection, they say.

"I doubt whether the committee would perform well and effectively because it is led by a chairman who comes from a party that has signed a political contract as a government supporter," Arbi Sanit, political observer of the University of Indonesia (UI) said on Sunday.

Pessimism is also expressed by Burhanuddin Muhtadi, researcher of the Indonesia Survey Institute (LSI). He said that political parties in Indonesia were accustomed to cartel politics.

"I am pessimistic about the fate of the committee, even as of the very beginning, because many political parties in Indonesia had been trapped the cartel politics," Muhtadi said.

The House of representatives formed the inquiry committee on Friday after hearing a report of the State Audit Board (BPK) on its investigative audit of Bank Century that there was a suspected effort to engineer additional bailout funds (PMS) for the bank.

The case came up to the surface when Bank Century almost collapsed some time ago after its assets worth Rp11 trillion were transferred and stashed overseas by major shareholder Robert Tantular.

In order to help the ailing bank, the government provided it with bailout funds amounting to Rp6.7 trillion without the approval of the House of Representatives (DPR).

Arbi Sanit said that he had doubts whether the newly formed House Inquiry Committee would perform maximally in probing into the Bank Century bailout scandal because most of the committee members were political parties which had signed contracts with the government.

The 30-member committee appointed Muhammad Idrus Marham of the Golkar Party in its meeting on Friday (Dec 4.). The Golkar Party is one of the political parties which coalesced with the ruling Democratic Party in the House.

"As an executive of the party, though there is a difference of opinion, he would not adopt a stance that is different from the government`s," Sanit said. He predicted that the voice of the parties in coalition in deciding the result of the inquiry committee, if it reached through a voting mechanism, would be inclined to support the government.

If the final results of the inquiry committee had been decided in this way, the public hope for the revelation of the real problem with the Bank Century case would not be satisfied, he said.

The same voice was also aired by LSI researcher Burhanuddin Muhtadi. He said he was pessimistic that the House Special Inquiry Committee would be able to reveal the truth with regard to the Bank Century bailout case.

"I became pessimistic about the committee since the very beginning because the political parties in Indonesia had been trapped in cartel politics," he said.

He said that even if it was chaired by lawmaker Gayus Lumbuun of the Indonesian Democratic Party of Struggle (PDIP) faction, the House Inquiry Commission would still not be free from political intrigues.

"This is because each of the political parties in the House already has the ace against their political opponents," he said.

According to Muhtadi, a PDIP cadre was also implicated in a bribery case with former Bank Indonesia (BI/central bank) senior deputy governor Miranda Goeltom.

"This is a part of old cases with Indosat, the sale of a VLCC tanker, and presidential instruction (issued by then President Megawati Soekarnoputri) No. 8 / 2002 that stopped the investigation of at least ten suspects in the BI liquidity assistance case," Muhtadi said.

The presidential instruction arranged the release and discharge which stated that debtors of the National Bank Restructuring Agency (BPPN) were exempted from debts.

Muhtadi said Golkar also faced the same thing where many old cases involved its cadres and had the potential to be used as a means of lobbying a political barter. The financial scandals which implicated political brokers involved many political parties.

They usually kept silent if there was a `just` distribution of money interest based on the proportion of their seats in the House of Representatives (DPR).

"Cartel politics leads lawmakers to mutually provide protection such as those in the cases of Bulogate 2 and Bank Bali sometime in the past," Muhtadi said. Thus, the only most probable achievement the House Inquiry Committee could make is to find a scapegoat or to determine that the Bank Century case is a civil case, he said.

He said that judging from the composition of the inquiry committee leadership and the interest of the House factions, there was a big possibility that the inquiry would run aground before reaching its goals.

In the meantime, a number of student activists over the weekend also expressed fear that the House inquiry into the Bank Century case could run aground. "There is an indication the inquiry will run aground before it reaches its objectives," Bambang M Fajar, chairman of the Muslim Student Association (HMI), said.

He said many members of the special inquiry committee were not the initiators of the petition. They even fought to chair the committee while they actually had given little to support the handful of legislators who had led the House inquiry initiative since the beginning.

The same concern was also expressed by Heni Lestari, presidium chairwoman of the Women Action Wing of the Indonesian Nationalist Student Movement (GMNI).

She regretted the success of certain political parties in including their cadres in the committee. "Therefore, there is no choice for us, elements of all community movements, but to launch mass rallies to guard the investigation process of the House committee," she said

Source: ANTARA News

05 December 2009

Investors Asked to be Cautious in Facing 2010

TEMPO Interactive, 3 December 2009

The Finance Minister Sri Mulyani Indrawati is asking investors to remain cautious when facing the global economy, because its consolidation will not start until next year up to 2011. “So, take care,” said Sri Mulyani when opening the “Investor Summit and Capital Market Expo 2009” in Jakarta yesterday.

According to Sri Mulyani, the global financial crisis in 2008 forced every nation to perform rescue acts through various fiscal and monetary policies.

For fiscal policies, every government poured out bailout funds, like the Rp73.3 trillion from the Indonesian government to increase buying power and to push economic growth.

In the monetary sector, the Central Bank controlled low inflation, relaxed key interest rate and printed money to fill any financial system liquidity shortages.
As a result, there is now an abundance of liquidity in the world.

Now, when the financial crisis has subsided on account of the global relief efforts, various nations will readjust their policies.

“Investors should also make some readjustments,” she said.”So, don’t expect the present agreeable condition, like abundance of funds, low interest rate and low inflation, to last forever. “

Sri Mulyani said she expected investors and entrepreneurs to exercise caution and ensure transparency and consistency in running their businesses. She allows market players to obtain maximum profits as long as this doesn’t disrupt the whole system.

Nevertheless, she said she hoped investors stayed optimistic on seeing Indonesia’s future potential economic growth. The government, she said, will keep on trying to maintain the public’s and investors’ trust.

For next year budget, the government is targeting 5.5% economic growth and 5% inflation. The Rupiah exchange rate is targeted at Rp10,000 against the US Dollar US$ and the nation’s oil price US$65 per barrel.

The Central Bank caretaker Governor, Darmin Nasution, said that economic growth will improve next year. Besides the potential crude oil price increase, non oil and gas prices will also increase next year.

Source: TEMPO Interactive