ID :
25329
Sat, 10/18/2008 - 21:45
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https://oananews.org//node/25329
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News Focus: GOVT STEPS TO OVERCOME IMPACT OF CRISIS GET ECONOMISTS' APPRECIATION
By Eliswan Azly
Jakarta, Oct 17 (ANTARA) - A series of steps taken by the government in anticipating the impact of the current global crisis which has hit many countries in the world and Indonesia is no exeption, gained high public support especially from the economists in the country.
In fact, some economists expressed support to the governemnt's steps in anticipating the impact of the crisis, saying the steps were correct. The government was even believed to have succeeded in preventing panic in the public by safeguarding stability in the financial and banking sectors
Some noted economists like Umar Juoro, chairman of the board of directors of the Center for Information and Development Studies (CIDES), Fadhil, researcher at the Institute for the Development of Economy and Finance (Indef), Chatib Basri, director of the University of Indonesia's Economics and Management Development Insitute, Raden Pardede, secretary general of the Indonesian Forum Foundation, Rudjito, head of organizational affairs of the Indonesian Economists Association, Hadi Soesastro, executive director of the Center for Strategic and International Studies, Ninsapti Triaswati, member of the advisory board of the Indonesian Institute , Joyowinoto, senior director of the Brighton Institute and Bambang PS Brodjonegoro, dean of the Economics Faculty of the University of Indonesia, had a meeting with President Susilo Bambang Yudhoyono at his office here on Friday to hear the steps taken by the government in overcoming the impact of the crisis.
Hadi Soesastro said the most important step in anticipating the impact of the crisis was safeguarding the stability of the financial and banking sectors.
"The government has already made the right efforts. It has brought about peace and calm. The collapse of the financial sector is usualy caused by panic and distrust apart from outside influence," he said.
The regulation in lieu of law on the financial sector safety net (JPSK) issued by the government was seen as the right step. It was a mandate of Law No.3/2004 on Bank Indonesia which would allow the government to take a decision in the event of difficult financial conditions that has a systematic impact and to anticipate a threat posed by the global financial crisis that may endanger stability of the financial system and national economy.
"The government regulation is a supplement to the two government regulations issued earlier. This does not mean that a crisis has happened. If we work together there won't be a crisis," Hadi qouted Finance Minister Sri Mulyani as saying.
JPSK is a mechanism of protecting the financial system against the threat of the crisis including the prevention and handling of the crisis. In general, JPSK is designed to create and preserve the stability of financial system by controlling financial institutions and payment systems, providing short-term payment facilities, and preventing and handling a crisis.
The measures to prevent and handle a crisis include efforts to handle liquidity difficulties and/or solvability problems of banks and non-bank finance institutions that have a systematic impact.
Furthermore Soesatro hoped the government would continue maintaining stability of the monetary sector while making efforts to move the real sector and attract investors.
"There will be tight competition in capital collection in the world in the next two years as credits are down. So, we must compete. Investment must be increased," he said.
To that end, he called on the government to improve the country's investment climate and at the same time strengthen the economy so that it could compete in attracting capital from other countries.
Soesastro and the other economists especially appreciated the issuance of the government regulations in lieu of law Perppus which provided a guarantee for the people's deposits to prevent panic.
"The three Perppus are important and have already been issued. They gave a peace of mind to the people so that there was no panic. That is the most importamt thing," Fadhil, another economist, said.
He hoped the government would take further correct steps in the future to support the growth of the real sector which was affected most as a result of decreasing exports to Europe and the United States.
In addition, he hoped bank interest rates could be made more competitive to increase market liquidity.
The economists also called on the government to remain alert towards further developments in the crisis and be ready to take short-term, medium-term and long-term steps.
Umar Juoro meanwhile said the financial sector in Indonesia cannot go by itself but must also support the real sector.
With such a policy, he said, the country's economic fundamentals would be strong enough to weather upheavals.
"What we are emphasizing here is what the government should make banks continue to play an optimum role in financing the real sector," he said.
In addition, to reduce the cost of the crisis to be borne by the country, the government can also provide incentives or facilities to solve liquidity difficulties and/or solvability problems faced by the private sector.
The incentives and facilities include the provision of fiscal incentives and the easing of legislation.
The funds needed to prevent and handle the crisis will be taken from the state budget through the issuance of state bonds or other means
Soesastro said it was not impossible that the global crisis would worsen if anohter big company in the US also collapsed.
"The recession will continue in the three quarters next year, according to US economists. We do not know what impact this will have on Indonesia. There is no recipe to deal with it and therefore we must stay alert," he said.
The economists said to meet the worsening economic conditions in the US, the economy in East Asia including in Southeast Asian countries, China, Japan and South Korea must be strengthened.
It is for these purpose that President Susilo Bambang Yudhoyono underlined the need for ASEAN member states to take harmonious steps in the face of the current global financial crisis.
Harmonious steps would be more credible if China, Japan and South Korea take part in the efforts, Yudhoyono said..
"Of course, the cooperation will be more credible if China, Japan, South Korea and ASEAN member states harmonize their steps to face the global financial crisis," he said.
Yudhoyono on Thursday called a meeting, attended by Foreign Minister Hassan Wirajuda, Finance Minister Sri Mulyani Indrawati and Coordinating Minister for Political, Legal and Security Affairs Widodo AS to discuss preparations for an ASEAN meeting aimed at figuring out the regional grouping's steps to face the global financial crisis.
In fact, the president said, ASEAN member states had adopted an ASEAN Economic Concept, along with China, Japan and South Korea.
In this context, Indonesia will propose that ASEAN leaders who will attend an Asia-Europe Meeting (ASEM) in Beijing next week convene a meeting to discuss common steps to face the global financial crisis, he said.
However, Umar Juoro appreciated the steps to overcome the impact of the crisis in the country in particular and concerted efforts as proposed by Yudhoyono to be taken by Asian countries to deal with the crisis at international level.
***3***
(T. E002/A/HNG/A/E002)
Jakarta, Oct 17 (ANTARA) - A series of steps taken by the government in anticipating the impact of the current global crisis which has hit many countries in the world and Indonesia is no exeption, gained high public support especially from the economists in the country.
In fact, some economists expressed support to the governemnt's steps in anticipating the impact of the crisis, saying the steps were correct. The government was even believed to have succeeded in preventing panic in the public by safeguarding stability in the financial and banking sectors
Some noted economists like Umar Juoro, chairman of the board of directors of the Center for Information and Development Studies (CIDES), Fadhil, researcher at the Institute for the Development of Economy and Finance (Indef), Chatib Basri, director of the University of Indonesia's Economics and Management Development Insitute, Raden Pardede, secretary general of the Indonesian Forum Foundation, Rudjito, head of organizational affairs of the Indonesian Economists Association, Hadi Soesastro, executive director of the Center for Strategic and International Studies, Ninsapti Triaswati, member of the advisory board of the Indonesian Institute , Joyowinoto, senior director of the Brighton Institute and Bambang PS Brodjonegoro, dean of the Economics Faculty of the University of Indonesia, had a meeting with President Susilo Bambang Yudhoyono at his office here on Friday to hear the steps taken by the government in overcoming the impact of the crisis.
Hadi Soesastro said the most important step in anticipating the impact of the crisis was safeguarding the stability of the financial and banking sectors.
"The government has already made the right efforts. It has brought about peace and calm. The collapse of the financial sector is usualy caused by panic and distrust apart from outside influence," he said.
The regulation in lieu of law on the financial sector safety net (JPSK) issued by the government was seen as the right step. It was a mandate of Law No.3/2004 on Bank Indonesia which would allow the government to take a decision in the event of difficult financial conditions that has a systematic impact and to anticipate a threat posed by the global financial crisis that may endanger stability of the financial system and national economy.
"The government regulation is a supplement to the two government regulations issued earlier. This does not mean that a crisis has happened. If we work together there won't be a crisis," Hadi qouted Finance Minister Sri Mulyani as saying.
JPSK is a mechanism of protecting the financial system against the threat of the crisis including the prevention and handling of the crisis. In general, JPSK is designed to create and preserve the stability of financial system by controlling financial institutions and payment systems, providing short-term payment facilities, and preventing and handling a crisis.
The measures to prevent and handle a crisis include efforts to handle liquidity difficulties and/or solvability problems of banks and non-bank finance institutions that have a systematic impact.
Furthermore Soesatro hoped the government would continue maintaining stability of the monetary sector while making efforts to move the real sector and attract investors.
"There will be tight competition in capital collection in the world in the next two years as credits are down. So, we must compete. Investment must be increased," he said.
To that end, he called on the government to improve the country's investment climate and at the same time strengthen the economy so that it could compete in attracting capital from other countries.
Soesastro and the other economists especially appreciated the issuance of the government regulations in lieu of law Perppus which provided a guarantee for the people's deposits to prevent panic.
"The three Perppus are important and have already been issued. They gave a peace of mind to the people so that there was no panic. That is the most importamt thing," Fadhil, another economist, said.
He hoped the government would take further correct steps in the future to support the growth of the real sector which was affected most as a result of decreasing exports to Europe and the United States.
In addition, he hoped bank interest rates could be made more competitive to increase market liquidity.
The economists also called on the government to remain alert towards further developments in the crisis and be ready to take short-term, medium-term and long-term steps.
Umar Juoro meanwhile said the financial sector in Indonesia cannot go by itself but must also support the real sector.
With such a policy, he said, the country's economic fundamentals would be strong enough to weather upheavals.
"What we are emphasizing here is what the government should make banks continue to play an optimum role in financing the real sector," he said.
In addition, to reduce the cost of the crisis to be borne by the country, the government can also provide incentives or facilities to solve liquidity difficulties and/or solvability problems faced by the private sector.
The incentives and facilities include the provision of fiscal incentives and the easing of legislation.
The funds needed to prevent and handle the crisis will be taken from the state budget through the issuance of state bonds or other means
Soesastro said it was not impossible that the global crisis would worsen if anohter big company in the US also collapsed.
"The recession will continue in the three quarters next year, according to US economists. We do not know what impact this will have on Indonesia. There is no recipe to deal with it and therefore we must stay alert," he said.
The economists said to meet the worsening economic conditions in the US, the economy in East Asia including in Southeast Asian countries, China, Japan and South Korea must be strengthened.
It is for these purpose that President Susilo Bambang Yudhoyono underlined the need for ASEAN member states to take harmonious steps in the face of the current global financial crisis.
Harmonious steps would be more credible if China, Japan and South Korea take part in the efforts, Yudhoyono said..
"Of course, the cooperation will be more credible if China, Japan, South Korea and ASEAN member states harmonize their steps to face the global financial crisis," he said.
Yudhoyono on Thursday called a meeting, attended by Foreign Minister Hassan Wirajuda, Finance Minister Sri Mulyani Indrawati and Coordinating Minister for Political, Legal and Security Affairs Widodo AS to discuss preparations for an ASEAN meeting aimed at figuring out the regional grouping's steps to face the global financial crisis.
In fact, the president said, ASEAN member states had adopted an ASEAN Economic Concept, along with China, Japan and South Korea.
In this context, Indonesia will propose that ASEAN leaders who will attend an Asia-Europe Meeting (ASEM) in Beijing next week convene a meeting to discuss common steps to face the global financial crisis, he said.
However, Umar Juoro appreciated the steps to overcome the impact of the crisis in the country in particular and concerted efforts as proposed by Yudhoyono to be taken by Asian countries to deal with the crisis at international level.
***3***
(T. E002/A/HNG/A/E002)
