But although Indonesia was not directly affected, it still had to prepare for a worst scenario that might occur in the future, Economic Affairs Coordinating Minister Hatta Radjasa said.
Jakarta (ANTARA News) - Indonesia`s economy is not directly affected by the present global financial turmoil and already in a safe and secure position, a minister said.

But although Indonesia was not directly affected, it still had to prepare for a worst scenario that might occur in the future, Economic Affairs Coordinating Minister Hatta Radjasa said here Thursday.

Speaking to reporters after attending a coordination meeting on the latest economic developments, he said the government`s present protocol to deal with a crisis was better than in 2008, while the business world was well established and the country`s macro-economic conditions were more stable than in 2010.

"Government bond buybacks can also be done by state owned enterprises (BUMNs) under the Bond Stabilization Framework (BSF) we have created while the central bank (BI) can take action. So we are in much better position than in 2008," he said.

The government would also maintain the state`s financial health, reduce long-term debt and borrowing by prioritizing domestic financing.

"Our debt situation is quite good, well managed by reducing debts or loans and using domestic financing," Hatta said.

On the current global economic conditions, he said if the US government adopts a quantitative easing policy, fund flows will occur into developing countries such as Indonesia.

Therefore, the government was preparing an instrument for the incoming funds to be utilized not only in the financial sector but also in the real sector, infrastructure development in particular.

"We must use the funds to avoid them from entering short term activities, portfolios and the financial sector, but we must also think how these fund can be used in the infrastructure sector in the near future," Hatta said.

Finance Minister Agus Martowardojo said the meeting also discussed developments in the global economy which were expected to last over the next three to four years.

However, Indonesia`s conditions showed a better situation with its first semester growth reaching 6.5 percent and this figure expected to continue in the third quarter up till the end of the year.

"This means while the developed countries were in a situation where they had to keep making lower economic growth corrections, Indonesia is in a better situation. The more so if we can overcome the infrastructure aspects and the things that hamper investment in Indonesia," Agus said.

The finance minister said he could give the assurance that the government had already prepared a necessary response to manage the economy carefully by increasing its oversight over the financial industry and capital markets of Indonesia.(*)

Editor: Heru Purwanto
Copyright © ANTARA 2011