SBY to form committee to oversee economy

Erwida Maulia and Aditya Suharmoko, The Jakarta Post , Jakarta | Mon, 02/01/2010 11:04 AM | Business

President Susilo Bambang Yudhoyono said he would soon form an economic committee, involving business communities, tasked to assist the government to help solve problems hampering economic growth. “In the near term, I will form the National Economic Committee, which will follow the government along not only in crisis but also in normal times,” Yudhoyono said in his speech Friday before hundreds of participants attending an event organized by the Indonesian Chamber of Commerce and Industry (Kadin). “Thus, when a crisis strikes we wouldn’t be so busy and would be able to respond properly,” he added.
Yudhoyono said the committee would comprise members and executives of Kadin. The powerful business group Kadin has supported the government by providing constructive criticisms and creating a roadmap for Indonesia’s economy for the period 2009 to 2014.

The government said it wants to achieve an average economic growth rate of between 6.3 and 6.8 percent in the next five years. Yudhoyono said that learning from the 1997-1998 Asian financial crisis and the recent global financial crisis, the country would need a solid partnership between the government, the private sector and economists to tackle economic issues arising. There was no such partnership during the Asian crisis, which led to prolonged negative impacts affecting Indonesia’s economy, the President said. The partnership, however, was built and maintained during the recent global crisis, and this helped the country to hit higher growth while many other economies suffered contraction. Indonesia’s economy expanded by about 4.3 percent last year and is expected to accelerate to 5.5 percent growth in 2010, the government said.

The Central Statistics Agency will announce the official figure of last year’s growth on Feb. 10. Hariyadi Sukamdani, Kadin’s vice chairman on fiscal policies, taxation and customs, said the committee would play a crucial role in managing the economy. “The National Economic Committee is needed to simplify communications and coordination between the real sector and the government,” he said. He added that the real sector now needs supportive government policies to help it to expand and boost economic growth. He cited the example of the fiscal stimulus worth Rp 73.3 trillion (US$7.84 billion) provided by the government last year to cushion the negative impacts of the global crisis, but this did not help the real sector very much. “Although the real sector really needed the government’s help [at that time],” he said. Economist Dradjad H. Wibowo said the National Economic Committee might have similar tasks to the National Economic Council (NEC) in the US. The NEC, formed in 1993, is also called advise President Barack Obama on economic policies. It is headed by Lawrence Summers, appointed by Obama in 2009.

The NEC’s four principal functions are: coordinating policy-making on domestic and international economic issues; coordinating economic policy advice to the president; ensuring that