 | EVENTS and ACTIVITIES
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December 14, 2000 Stanley Roth, Assistant Secretary of State for East Asia Roth began his comments by relaying what has gone right over the past several years. Indonesia has not been given due credit for successfully shifting to a democratic government with freedom of the press, freedom of association, and adherence to Constitutional process. Acknowledging that the mechanisms for this change are far from perfect, Roth emphasized Indonesia did not descend into chaos and mob rule following the upheavals of 1998-99 when it well could have. Roth does not believe in doomsday scenarios for Indonesia. It will not disintegrate. It most likely muddle along but will have a hard time taking strong strides towards returning to its former leadership role in the region.
February 1, Luhut Panjaitan, Minister of Industry and Trade. With exports to the US increasing, electricity consumption on the rise, and industrial capacity up from 40 to 70%, Indonesia's economy presents ample "good news". Non-oil exports recorded a 23% jump between 1999 and 2000, the highest in Indonesia's history. Growth may slow in 2001 but should be in the 4% range. Its not as high as the Minister would like, but given the political problems and the high debt facing the country in the wake of the Asian crisis of 1997 and the end of the Suharto regime, he'll take it. The Minister appealed to his audience to understand the level of commitment to transparency of the current government. As an example, he noted a new interagency team that is eliminating corruption in IBRA.
March 15, James Castle (President, AMCHAM Indonesia) and Edwin Gerungan (Chairman, IBRA) The economy began to recover in 2000 and will register 4-5% growth when the numbers are all in. Such growth won't be repeated this year as political uncertainty and a US slow down will affect Indonesia exports. With all the negative news, Castle says there is no need to be defeatist. "We have a free press, plenty of open discussion. Parliament hasn't done anything really wacky." However, political parties still represent their leaders in most cases, not the people. "Also, the military is not egging to take power by most measures. Doesn't mean they won't, but its unlikely". Gerungan pointed to some positive developments: Capital levels have increased from -40% capital to asset ratio in 1999 to 4%. The ratio will grow to 8% by year end 2001. Non performing loans (NPL's) have been reduced substantially to 19%. Majority of NPL's are now in IBRA . Many have been successfully restructured. From June to November 2000 credit expanded 14%.
April 25, Indonesian Economists' Roundtable, Dr. Mari Pangestu predicts a "muddling through" 2-3% growth generated by businesses not dependent on the banking sector. International financial institutions may delay funds but won't pull the plug. Dr. Djisman Simandjuntak thinks Megawati would have a difficult time creating a unified economic team because she will have to include ministers from other parties in the Cabinet. Simandjuntak said Indonesia would survive due to the strength of what he called the "people's sector" or informal sector, Manggi Habir, focused on the micro view, saying that sectors such as natural resources (plantations, mining, fisheries), food processing, tobacco, beverages, and retail distribution were doing well. He also noted that provinces were seeking credit ratings from his agency (PEFINDO) in order to issue bonds. The central government policy is to ban such borrowing.
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