IMF urges Indonesia to target inflation

Indonesia needs to bring inflation under tighter control and scrap policies that restrict spending in order to consolidate its nascent economic recovery, the International Monetary Fund has advised after its annual review of south-east Asia's largest economy. But the IMF praised the Indonesian government and central bank for their response to the global financial crisis and raised its estimate for economic growth this year to 3-4 per cent from 2.5 per cent.

Thomas Rumbaugh, the IMF mission leader, told the Financial Times that sound policies and a stable political environment had helped Indonesia attract comparatively more foreign capital as the global risk appetite had picked up.However, he cautioned that the fortunate timing of April's five-yearly legislative elections also played a role in the country achieving 4.4 per cent growth, year on year, in the first quarter of 2009. He said the 1.6m candidates and 38 parties injected enormous sums into the economy at a time when the government's stimulus package and central bank's rate cutting had yet to have an impact.The government has launched a Rp 73,300 bn ($7.3bn, ?5.3bn, £4.6bn) stimulus package, while the central bank allowed the rupiah to weaken from 9,500 to the US dollar to almost 13,000 in October and then gradually cut interest rates as the economy improved.Last Friday the rupiah strengthened to above 10,000 to the US dollar for the first time since last October.

Bank Indonesia cut its benchmark rate 25 basis points last week to 7 per cent, down 250 basis points from December.Mr Rumbaugh said he thought easing was now at or near an end, particularly considering the inflation forward indicators, such as rising commodity prices.Inflation is currently 6.04 per cent, year on year. The IMF expects it to fall to 5 per cent for 2009, low by Indonesian standards but higher than the regional average.

Mr Rumbaugh said: "I think the [economic and monetary authorities] would strengthen the credibility of their macroeconomic policy if they could get inflation down and reduce its volatility." He added that they also needed to create more fiscal space to spend more money on infrastructure and social protection."The revenue ratios are still very low. The number of registered taxpayers is very low."They've made some good progress in the last couple of years in that area but they've got a long way to go."

Comments

Greenpeace boycott Palm oil products Duta Palma

Environmental organization Greenpeace India has demanded that all Indian palm oil importers and corporate consumers immediately stop palm oil sourcing from Indonesian companies like Duta Palma who make palm oil by destroying forests and tiger habitat in Indonesia. An investigative report issued by Greenpeace Indonesia released on Thursday links India's growing palm oil imports and corporate apathy to Duta Palma's destruction of hundreds of acres of Indonesian rainforests and tiger habitat in complete disregard of Indonesian government&# 39;s moratorium on such activities in the rainforest. Big Indian corporates like Ruchi Soya, Adani -Wilmar, Godrej Industries, Parle, Britannia are among many who use Indonesian palm oil in their products on a large scale. "Duta Palma's dirty oil could well be entering into their supply chains. Yet, so far, no Indian company has taken any visible steps to clean up their supply chain, to delink their brands from the ...

Debate Islam in Indonesia

http://www.thejakar taglobe.com/ opinion/interloc utors-of- indonesian- islam/560447 Interlocutors of Indonesian Islam Ahmad Najib Burhani | December 08, 2012 A few months ago, the Japanese anthropologist Mitsuo Nakamura told me that studying Nahdlatul Ulama as an organization was beyond the imagination of any American scholar from the 1950s to the ’70s. But he is not the only academic to have noticed this. George McT. Kahin of Cornell University stated the same thing. Even NU-expert Martin van Bruinessen was not expecting to study NU as his primary focus when he came to Indonesia for the first time in the 1980s. During the early decades of Indonesian independence, NU was relatively unorganized and its management was largely based on the authority of religious teachers ( kyai ). Of course there were a number of scholars who studied NU-affiliated religious schools ( pesantren ) and its kyai, but not NU as an organization. Even though NU was one of the ...

is that true in Indonesia there freedom of religion?

The problems began shortly after Tajul Muluk, a Shiite cleric, opened a boarding school in 2004. The school, in a predominantly Sunni Muslim part of East Java, raised local tensions, and in 2006 it was attacked by thousands of villagers. When a mob set fire to the school and several homes last December, many Shiites saw it as just the latest episode in a simmering sectarian conflict — one that they say has been ignored by the police and exploited by Islamists purporting to preserve the purity of the Muslim faith. Indonesia, the world’s most populous Muslim-majority country, has long been considered a place where different religious and ethnic groups can live in harmony and where Islam can work with democracy. But that perception has been repeatedly brought into question lately. In East Java, Sunni leaders are pushing the provincial government to adopt a regulation limiting the spread of Shiite Islam. It would prevent the country’s two major Shiite organizations from ...

INDONESIA A NEWS

Search This Blog