Indonesia concerned about European crisis

Indonesia concerned about European crisis

Photo document of President Susilo Bambang Yudhoyono at Business 20 Summit (B20) in Los Cabos, Mexico. (ANTARA/Setpres-Abror)

"We are very concerned about the extent of the crisis in Europe."
Jakarta (ANTARA News) - Indonesia is concerned about the ongoing crisis in Europe, although it has not had a major impact on some of the domestic business sectors.

The crisis has not affected some business sectors in Indonesia, but, the country hopes for an early end to the crisis, because, it is feared to it will have a negative impact on the global community.

Therefore, when speaking before business delegates at the B-20 forum in Los Cabos, Mexico, President Susilo Bambang Yudhoyono, expressed hope that the European Union countries would resolve the current crisis as soon as possible.

"We are very concerned about the extent of the crisis in Europe. I cannot pretend to say I have a solution to such a difficult economic, political, and social crisis in the European region, but, I do hope that the European countries will be able to solve it as soon as possible," President Yudhoyono stated.

According to the Indonesian head of state, the prolonged economic crisis in Europe and the current political dynamics in Greece will influence the European financial centers, as well as those in Indonesia.

President Yudhoyono then highlighted about the importance of cooperation among business groups and G-20 economic countries to find the best possible solution to the economic crisis in Europe.

Meanwhile, Ministry of Cooperatives, Small and Medium Enterprises Deputy for Business Network and Marketing, Neddy Rafinaldi Halim, said the crisis has not affected the export of small and medium enterprises (SME) commodities from Indonesia to the European countries.

"We are still able to sell our cooperatives` and small and medium enterprises` commodities in the European Union countries," said Neddy Rafinaldi Halim.

He noted that the SME commodities had certain typical characteristics, for which they could still be exported to crisis-stricken European markets.

"The export of small and medium enterprises` handicraft products to European countries has not been affected by the crisis because, their production cost is low and they still have enough margins in foreign markets," he said.

However, East Nusa Tenggara Governor, Frans Lebu Raya, warned the public in the province to be prepared for the impact of the European debt crisis.

"Let us be careful of the impact of the ongoing European crisis, which might spread to the regional level," the governor said at a coordination meeting in Kupang, the provincial capital, on Thursday.

Lebu added that the local government should also be ready to deal with the possible impact of the European crisis on the province.

The governor urged his people to remain alert, because Finance Minister Agus Martowardojo said the European crisis was unlikely to end in the near future.

But PT Tirta Sarana Suksess (Tahesta beverage producer) Marketing Manager, Vera Christianti, said in Surabaya, East Java, recently, that the European crisis has not had an impact on beverage businesses in the national markets.

"The nation`s beverage businesses are unaffected by the global economic crisis because, the buying power of domestic consumers remain high," Vera Christianti said.

She mentioned that the company is continuing innovation of its products in order to step up beverage business at domestic markets.

"Moreover, the domestic market opportunity for beverage products is still wide open as a result of extreme and unpredictable weather conditions," Vera noted.

Even the Garuda Indonesia President Director Emirsya Satar said that despite the European crisis, the positive economic growth in Indonesia would continue to maintain Garuda`s domestic market.

According to Emirsya, the prolonged European crisis had prompted the national flag carrier Garuda to place its domestic and regional market on a solid footing.

Although the European crisis has not had a significant impact on Garuda, Emirsya said the airline company reduced its flights frequency to Amsterdam to four times a week.

Meanwhile, Finance Minister Agus Martowardojo said, that the key to the country`s economic success was the role of businessmen and domestic economic stakeholders.

"It is not only that. Another factor is investment, which continued growing until now," he said.

Agus added that in the future, the government has to think of developing food and agricultural industries so that the country could withstand the economic turmoils overseas.

Therefore, he said he was confident that Indonesia could withstand the impact of the current economic crisis in Europe.

"The experience in dealing with the global economic crisis in 2008, 2009 and 2011 was an invaluable lesson for Indonesia. When the crisis hit Europe last year, our economy grew by 6.5 percent, while Europe, India and China remained pressured," he said.

Amid the European crisis, Standard Charted economist Fauzi Ichsan pointed out that the execution of the master plan for stepping up and growth of Indonesia`s economy (MP3EI) could serve as a solution for Indonesia.

"If the growth of the European economy suddenly drops, and the world economy weakens, then, the government needs to implement the MP3EI, as it has been planned," Ichsan has said.

According to him, Bank Indonesia (Indonesia`s central bank) would need to stage an intervention in the foreign currency market and increase interest rates if the global crisis impacts the fiscal conditions and Indonesia`s monetary resources.

He further stated that the situation in Europe and the decreasing value of the Indonesian rupiah, as well as the Jakarta Composite Index, are entirely dependent on the results of the public election in Greece in mid-June 2012.