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10 May 2007
Minimum 10 Percent Investment Growth Required

The government needs investment growth to be 10 percent in order to catch up with the targeted non-oil and gas export growth of 14.5 percent.

Last year, investment growth was only three percent.
Mari Elka Pangestu, Trade Minister, said that investment growth was required in order to increase export growth.

“This year investment growth must be 10 percent, up from last year's three percent,” she said, on Monday (7/5).

She went on to say that the competitiveness of export products in the world market no longer faces the matter of lowest production cost anymore.

“But how to deliver goods quickly and at a low distribution cost,” said Mari.

In order to support investment and export growth, she said the government will prioritize the state budget for building infrastructure.

“Inefficient transportation and logistics are problems that must be solved,” she said Mari.

Muhammad S. Hidayat, Chairman if the Indonesian Chamber of Commerce and Industry (Kadin), acknowledged he was pessimistic about the target set by the government last week.

At that time, the Coordinating Minister for the Economy said that investment amounting to Rp1,180 trillion was needed to reach the economic growth target of 6.8 percent by 2008.

It is expected that most of the investment will come from the private sector because the government can only provide around Rp141 trillion.

“With such target, we can no longer do business as usual. The government must do concrete policies in order to improve investment climate,” Hidayat told Tempo.

According to him, without concrete policies, such as government regulations, presidential regulations,
ministerial regulations or other regulations which separate the authority between central and regional governments, the investment target will not be met.


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