Friday October 23, 6:42 PM
Indonesia's new govt targets 7% growth
Indonesian President Susilo Bambang Yudhoyono said on Friday his new economic team is targeting seven percent growth by 2014, setting Southeast Asia's biggest economy back on its pre-crisis trajectory.
On the first full day at the helm of his new cabinet, which was sworn in Thursday after July presidential polls, Yudhoyono also promised the resource-rich country's wealth would be more evenly distributed.
"In the next five years we'll be getting back on track. Our target is seven percent or more to improve the livelihoods of the people," he said in an address to the inaugural session of the new cabinet.
Yudhoyono said his government had yet to work out the details of its plans but promised "development that is inclusive and just" to reduce poverty in the mainly Muslim archipelago of 234 million people.
The government has predicted growth of 4.0-4.5 percent this year, third only to China and India in the G20 club of rich and major developing countries. The economy grew 6.1 percent in 2008.
The local stock market has soared almost 80 percent in 2009, but about half the population continues to live on less than two dollars a day, according to the Asian Development Bank.
Yudhoyono said seven percent growth could have been reached this year but for the global downturn.
"Because of the economic storm, we've been set back," the 60-year-old former general said.
Yudhoyono's new coordinating minister for the economy, Hatta Rajasa, earlier said that while the government was aiming for seven percent growth by 2014, a longer-term eight percent target was "achievable".
His comments reflect the view among many investors that Indonesia is poised to join the so-called BRIC nations -- Brazil, Russia, India and China -- as one of the rapidly growing countries that could dominate the world economy by mid-century.
Yudhoyono was inaugurated Tuesday having won a landslide election victory in July, on promises to fight corruption and boost economic growth.
He has compiled a rainbow coalition of six parties controlling 423 out of 560 seats in parliament, but has come under fire for handing most seats to party-political figures rather than competent experts more likely to improve governance and fight corruption in the world's third biggest democracy.
The choice of former transport minister Rajasa as economy minister raised some eyebrows, but the all-important posts of finance and trade stayed with incumbents seen as reliable technocrats.
Former International Monetary Fund senior executive Sri Mulyani Indrawati kept the finance portfolio, while Mari Pangestu stayed in charge of the trade ministry, where she has been a steady advocate of open markets.
Indonesia's financial markets mostly welcomed Yudhoyono's comments, with the rupiah ending the session higher at 9,435 to the dollar compared with its Thursday close of 9,540. Local stocks closed 1.43 percent in the black.
Standard and Poor's ratings agency changed its outlook for Indonesia to positive from stable, raising hopes of a credit rating upgrade in 2010.
It said the brighter outlook was supported by an improving public-debt ratio and rising foreign reserves, which hit a record of 62.3 billion dollars on September 30, easing potential external liquidity concerns.
"Notably, these positive trends have not been derailed by the effects of the global financial market and economic turmoil of the past year," agency credit analyst Agost Benard was quoted as saying by Dow Jones Newswires.
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