The government is not remaining silent amid the uncertain global economic conditions. Besides boosting its trade surplus, the government is also completing national strategic programs to meet established targets.
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ANTARA FOTO/WIDODO S JUSUF
President Joko Widodo (right) in Bogor Presidential Palace, West Java, Tuesday (12/6/2018).
BOGOR, KOMPAS — The government is not remaining silent amid the uncertain global economic conditions. Besides boosting its trade surplus, the government is also completing national strategic programs to meet established targets.
The government is also striving to enable the immediate disbursement of regional funds to minimize the amount of government funds in banks. Another effort it is making is to maintain the 2018 State Budget performance.
The strategies to face the global economic uncertainty were discussed in two limited meetings on Monday (9/7/2018) at Bogor Palace, West Java. The first limited meeting that discussed strengthening the national economy to cope with the global economic turmoil lasted about four hours. The second limited meeting that discussed the 2018 State Budget prognosis lasted about one hour.
President Joko “Jokowi” Widodo, in opening the second meeting, said that the challenges of maintaining economic stability were not light. All countries, including Indonesia, were currently facing global economic uncertainty.
In order to maintain the stability of the domestic economy, the President asked all ministries to focus on implementing the planned programs. They should also aim to complete the national strategic projects on time.
Following the meetings, Finance Minister Sri Mulyani Indrawati said the government was encouraging exports and other activities that could generate foreign exchange in an effort to mitigate the impacts of the global economic turmoil. "The government has decided to provide support in the form of export incentives," she said.
ANTARA FOTO/SIGID KURNIAWAN
Finance Minister Sri Mulyani Indrawati
Central Statistics Agency (BPS) data recorded a US$2.83 billion trade deficit at the end of May.
Board of Commissioners chairman Wimboh Santoso of the Financial Services Authority (OJK) said the government would improve tourism support facilities, such as accommodation, clean water, transportation and security.
With regard to the state budget, the President asked all parties to maintain the first-semester momentum in strengthening the state budget performance. It was also necessary to maintain stability in the economy.
"I ask that the momentum of the first-semester achievements of the 2018 State Budget to be maintained, and if it can be, it should be improved even further in the second semester because the challenges we face are not light, especially concerning the uncertainty of the global economy," he said.
The state budget deficit in the first semester of 2018 was Rp 110 trillion, lower than the Rp 175 trillion in the first semester of 2017. The government is optimistic that this year’s state budget deficit would be 2.12 percent of gross domestic product (GDP), lower than the targeted 2.19 percent. State revenues were also better.
The government decided not to revise the 2018 State Budget. "Because the state budget posture is good and has not seen a major deviation in state revenues and expenditures, and has only seen a minor deviation, so we can state that we will not make changes to the 2018 State Budget," said Sri Mulyani.
This is the first time that the Joko Widodo-Jusuf Kalla government has not revised the state budget. The decision will be submitted to the House of Representatives next week.
Competitiveness
Indonesia should respond to the global uncertainty and polemic of the trade war between the United States and China with a competitive financial market. This was to prevent the long-term negative impacts of foreign capital outflows.
Bank Indonesia Governor Perry Warjiyo said in Jakarta on Monday that the government should formulate the right strategy amid the global uncertainty. The strategy should focus on controlling the current account deficit, encouraging foreign capital inflows and meeting domestic demand. Policy coordination between the government, BI and the OJK was key.
ANTARA FOTO/RIVAN AWAL LINGGA
Bank Indonesia Governor Perry Warjiyo
"The global uncertainty has created high risks in financial markets and triggered the withdrawal of capital in developing countries, including Indonesia," said Perry.
In addition to the policy mix, Perry said, the government should also set an immediate course to boost national economic growth, including through developing the tourism sector, increasing exports and producing raw materials domestically to replace imported capital goods. Policy breakthroughs were important to maintain market confidence and reduce the foreign capital outflow.
Meanwhile, Sri Mulyani said the government was creating a strong economic structure through improved competitiveness and a clear regulatory framework to support the economy in its efforts to silence the trade war drums. The statement was made in a written speech that Deputy Finance Minister Mardiasmo read during Monday’s book launch of Indonesia in the New World Globalization, Nationalism and Sovereignty at the Centre for Strategic and International Studies in Jakarta.
According to Sri Mulyani, the government was expected to overcome economic pressures through awareness and responsiveness based on measured confidence.
