The coordination meeting of Ministers within the Economic Compartment today discussed and addressed “Priority Agendas for the Indonesian Economy in the year 2003”. The meeting was chaired by the Coordinating Minister for Economic Affairs and attended by the Minister for Foreign Affairs, Minister for Energy and Mines, Menteri for Small and Medium Enterprises, Minister for Eastern Indonesia, Minister for Manpower and Transmigration, Minister for Infrastructure and representatives of all related departments and fields.

Coordinating Minister Dorodjatun Kuntjoro-Jakti stated that the priority agendas had been discussed at the Cabinet meeting earlier this month which are:

To promote investment, non-oil and gas exports and increase job opportunities;
To manage domestic and foreign debt to support fiscal sustainability:
To prepare an exit strategy after the completion of the IMF program at the end of 2003;
To manage recapitalization debt.
To maintain, rehabilitate and develop vital infrastructure.

These priorities are based on the understanding that despite macroeconomic improvements and monetary stability in 2001 and 2002, the real sector has not realized a tangible benefit as of yet. This has mainly been the result of constraints and technical problems at the micro and operational levels that inevitably result in a high-cost economy. These problems are:

Lengthy and costly procedures for new business operations, particularly long startup time and high startup cost;
Taxation procedures and administration;
Customs procedures and administration;
Weak conditions in the component and spare-part industries, as well as in the underutilized outsourcing and subcontracting potential domestically;
Manpower related issues;
High debt load presently existing within companies;
Bank intermediacy roles in channeling credit that is still unsatisfactory;

Rule of law issues;
Security issues;
Issues related to local regulations;
Issues related to environmental concerns;
Smuggling issues;
Corruption, Collusion and Nepotism (KKN) practices that are still prevalent.

In implementing these priority agendas, the Government will:

Establish a National Team on Investment and Non-Oil and Gas Exports chaired by the President;
Establishment of a Coordinating Team consisting of the Coordinating Minister for Economy, Minister of Finance and the Governor of Bank Indonesia to formulate an exit strategy after the completion of the IMF program at the end of 2003.
Minister Dorodjatun Kuntjoro-Jakti stated that the establishment of the teams was presented to the business community yesterday, who gave their support and trust in the hope that these teams will be more effective in overcoming the micro and operational problems as opposed to several earlier initiatives.

 Source :  Office of the Coordinating Minister for Economic Affairs