... the government must give stimulus as a compensation for capital that enters and to attract investors."
Pekalongan (ANTARA News) - Indonesia still relies on the export of commodities, making it vulnerable to losses in a competitive free market era, an observer has said.

"In view of that, supports are needed from all parties including the government to boost the exports, so that they can go international," the Director of the Institute for Development of Economic and Finance, Enny Sri Hartati, said at a seminar in Pekalongan, Central Java Saturday.

The countrys exports right now only reach 10 percent, while imports 21 percent, affecting the trade balance, she said.

"To balance them, the government must give stimulus as a compensation for capital that enters and to attract investors," she said.

Indonesias economic development also relies on the economic conditions in China and the United States as the biggest exporters, she said.

"The impact of Chinas economic decline has relatively affected Indonesia because its capital that has entered Indonesia will return home," she said.

To anticipate dependence on other countries Indonesia needs to take India as an example that has experienced a political process similar to Indonesia, Sri Hartati said.

"The transition of leadership in India is also the same as in Indonesia which is through economic stabilization with prices being reduced from eight to six percent, and this has brought an effect on interests," she said.

On the occasion, Sri Hartati reminded about the importance of strategic steps to be taken to face the ASEAN Economic Community such as improving the quality of human resources, infrastructure, capital supply and reform of the investment climate.

"What needs to be anticipated with regard to the ASEAN Economic Community is the widening of a trade deficit in line with increasing trade of goods and inflow of investment to Indonesia from outside ASEAN," she said.

(Reporting by Kutnadi/Uu.H-YH/INE/KR-BSR/O001)

Editor: Priyambodo RH
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