INDONESIA: President Susilo Bambang Yudhoyono says he is optimistic Indonesian economy can weather the worsening global trendDOM

Record ID: 791507

  • Title: INDONESIA: President Susilo Bambang Yudhoyono says he is optimistic Indonesian economy can weather the worsening global trendDOM
  • Date: 17th August 2011
  • Summary: PARLIAMENT MEMBERS LEAVING
  • Embargoed: 1st September 2011 13:00
  • Keywords:
  • Location: Indonesia, Indonesia
  • Country: Indonesia
  • Topics: Economic News,Politics
  • Reuters ID: LVAAZ54CF63U4ZH0E4T8JGL1FITX
  • Story Text: Indonesia can cope with a worsening global economic situation and has policy instruments in place to deal with a crisis, President Susilo Bambang Yudhoyono said on Tuesday (August 16).
    Southeast Asia's biggest economy has grown steadily at 6.5 percent this year, powered by consumption from an expanding middle class, natural resource exports and investment, while policy-makers have contained inflation and cut government debt levels.
    "Even though the economic situation in Europe and the United States is not good news for the world, we have sufficient confidence to overcome that uncertainty," said Yudhoyono during an annual state of the nation speech in parliament.
    Yudhoyono's popularity at home has fallen this year because of slow policy making and a stalled fight against corruption. But the economy has hummed along and foreign direct investment interest has surged from manufacturing and consumer firms.
    Foreign investors have taken the stock market to record highs and their bond ownership to record levels, with only a limited sell-off recently on increased global risk aversion following the U.S. sovereign rating downgrade.
    By contrast, Fitch Ratings looks set to upgrade Indonesia to an investment grade sovereign rating within the next year, a status that would put it on a par with BRIC nations such as Brazil and China, enable greater institutional investment and lower long-term borrowing costs for the government.
    In the speech Yudhoyono also said the government is committed to building Papua's economy.
    "Papua will be one of the economic corridors in a master-plan to speed up and expand economic development. Government policy will be focused on economic development, and we hope this can increase the welfare of the people," he added.
    Indonesia's government and military have been criticised in the past for human rights abuses in the province, after Indonesia took over Papua in 1969 from Dutch colonial rule in a vote by community leaders that was widely criticised as flawed.
    Earlier this month, thousands of indigenous Papuans marched on the local parliament in the capital of Jayapura and several other smaller rallies in cities in the country's easternmost and resource-rich province, demanding a referendum for independence from Indonesia.
    Indonesia's low-paid military has kept a tight rein on Papua in the past, not just because of the insurgency, but also because of attractive business opportunities including smuggling and the provision of security services, rights groups and academics say.
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