Indonesia`s economic performance is predicted to be better this year as the economy is expected to get ample fiscal room for infrastructure development.
Jakarta (ANTARA News) - Many have predicted that Indonesia will have better economic conditions this year as compared to last year.

The national economy in 2015 is believed to have better conditions offering business certainties that will lead to the achievement of a five-percent or higher economic growth, Head of the Permanent Committee for Food Resilience of the Indonesian Chamber of Commerce and Industry (Kadin) Fransiscus Welirang stated.

"Increasingly supportive macroeconomic conditions in 2015 will provide great business certainty and will be conducive to boost the flour industry to grow high or even higher than the national economic growth," he noted on December 30.

He noted that with the decision to reduce fuel subsidy, businesses will become better in 2015, as the economic conditions are expected to be more stable as compared to 2014.

Indonesias economic performance is predicted to be better this year as the economy is expected to get ample fiscal room for infrastructure development. It will also be supported with domestic consumption, investment, legal certainty, and reduced subsidy.

Therefore, Finance Minister Bambang Brodjonegoro is optimistic that the country will be able to meet its economic projection ranging between 5.5 percent and 5.8 percent in 2015. This is because the government has ample fiscal room to support its investment projects.

"I have an economic target that is between 5.5 percent and 5.8 percent. I predict it will touch the upper rate limit," the finance minister said on Monday (Jan.5).

He explained that the government has a fiscal room of Rp230 trillion, which will be allocated to the Ministry of Public Works, Ministry of Transportation, and Ministry of Agriculture to support investment activities.

President Joko Widodo has also expressed optimism over Indonesias economic growth in 2015 because of the fiscal room and flexibility available in the national budget.

"The fiscal room in the national budget is good and it will boost our economic growth in 2015," he stated last week.

Jokowi, as the President is popularly called, has been optimistic about the countrys future economic growth as the 2015 revised budget will focus on several important infrastructure projects.

President Jokowi had remarked that infrastructure development projects were vital to the economic growth of a country.

Therefore, according to Finance Minister Bambang Brodjonegoro, the government, through the Ministry of Public Works and Ministry of Transportation, will build better infrastructure. The agriculture ministry will develop irrigation facilities.

"The ministry of public works will build basic infrastructure while the ministry of transportation will develop ports and railways. The agriculture ministry will provide fertilizers, seeds, agricultural machine tools, and improve the irrigation system," the minister noted.

Bambang Brodjonegoro said the government will continue to widen the fiscal room by optimizing revenues and increasing the quality of state spending.

Besides showing optimism about budgetary aspects, the government is also convinced that investments will support economic growth as it will improve bureaucratic procedures for the issuance of business licenses. It has set up a one-stop service facility at the Capital Investment Coordinating Board (BKPM).

"The Mechanism of One Stop Service in the Front Office of BKPM will become operational in January 2015. With improved procedures, both domestic and foreign investors will be attracted. So, there will be no processes that will take longer time. This will boost economic growth," the minister said.

Brodjonegoro added that the government has also pinned hopes on domestic consumption to support the countrys economic growth because the export sector is still believed to be facing gloomy conditions and cannot contribute significantly to the economy in 2015.

"To keep opportunities open, we should also maintain the peoples purchasing power, because our exports cannot be expected to support the countrys economic growth. We do not know about it as it is also related to the Chinese economy. But we will do our best to become better this year than the previous year," the minister remarked.

A banker, Sunarso, also expressed optimism that economic conditions will be better this year.

"Indonesias economic growth in 2015 will not be as bad as that in 2014. I see that Indonesias economy in 2015 will improve further," Sunarso said last Wednesday.

He pointed out that the governments focus on infrastructure development and the guarantee of legal certainties will attract businesses to invest their capital in the country. This is regardless of the fact that until now foreign investments coming to Indonesia were mostly confined to portfolio investments.

"In the long run, the government must design an agriculture-based economic structure. Actually, this is not new as it had been tried in the past," noted Sunarso who is a member of the Alumni Forum of the Agriculture Institute of Bogor (IPB).

The agriculture industry has proven its capability in safeguarding Indonesias trade balance in any crisis. In order to develop an agriculture-based economy, the Indonesian government can start with a correct land division for agriculture, before accelerating its infrastructure development, financial support for agriculture, and reducing the import of agriculture products.

"In addition, giving guidance to farmers and their growth should not be forgotten," he added.

In the meantime, Franciscus Welirang, the chairman of the Food Resilience Permanent Committee of the Indonesian Chamber of Commerce and Industry (Kadin), is also convinced that Indonesia will create more business certainties in 2015. Thus, Indonesias economic growth is expected to reach 5 percent, or even higher.

He said the business world is convinced that the governments move to reduce fuel oil subsidies sometime ago will improve the countrys economic conditions that are better than those in 2014. Therefore, businesses will begin investing in 2015.

Indonesia, he remarked, is still a hope for foreign investors. This has been proven by a number of Japanese investors who have made plans to make investments in wheat business in Indonesia.

"Even though Japan and other European countries are still facing recession, they still have hopes in East Asian nations, including Indonesia," he added.

Earlier, Megawati Institutes Executive Director Arief Budiman remarked that Indonesias economic growth can reach 5.8 percent in 2015.

"The main factors that will boost Indonesias economy in 2015 are investments and private consumption. After all, the government will soon realize its infrastructure projects in 2015," he asserted.(*)

Reporter: Andi Abdussalam
Editor: Heru Purwanto
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