"Indonesia still has a chance to boost further its economic growth as long as it optimizes its capital expenditure, particularly in the infrastructure which is still going nowhere," economic analyst and observer of PT First Asia Capital, Ifan Kurniawan, said here on Tuesday.
Ifan said that if infrastructure was well prepared business players would increase the capacity of their production. With better infrastructure, he said, transportation cost would be cheap and the availability of stocks would be bigger.
Apart from that foreign capital in the domestic market would also vary, not only made in stocks exchange, money market, bonds and Bank Indonesia instruments, but also in the real sector.
When the real sector is growing it will enhance employment and provide bigger income for workers, he said.
He said that the big volumes of foreign capital inflows had driven the rate of stocks index almost reaching 4,200 points.
The Indonesian Stocks Exchange (BEI) now has reached 4,183 points, down seven points because market players were active in profit taking after stocks prices underwent a significant increase.
Therefore, he said, the government must introduce better regulations which facilitate low costs and generate business efficiency.
Ifan said that investors so far still faced various constrains when they wanted to get licenses for their investment at home.
Besides, the government should also be able to provide the needed electricity and gas so that foreign and domestic investors would be able to overcome the problems of their investment.
"We are optimistic that the government would be able to increase its gas supplies for domestic needs such as in Tanggul Papua," he said.
Yet, he said, the Indonesian economy will continue to grow even if it is overshadowed by policy, legal and political uncertainties. Investors, he added, have made anticipatory steps to face the risks. (A014)
Editor: Ella Syafputri
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