Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Fathan Qorib, Andin Aditya Rahman
Following their recent criticism of Indonesia’s sluggish and fragile economic growth, economists continue to scrutinize Indonesia’s current account deficit (CAD). The CAD problem is seen as a potential cause of another economic crisis.
According to Aviliani, an economist from EC-Think Indonesia, the Government must immediately issue a short-term policy in order to fix Indonesia’s CAD problem, otherwise Indonesia will be hit by an economic crisis within the next 4 months.
“If the CAD remains high without a short-term policy, then in the next 4 months we will enter a crisis,” stated Aviliana in Jakarta last Monday.
One such short-term policy is to quickly reduce fuel consumption by 50 percent. According to the economist, such a step would be effective in preventing the further exacerbation of Indonesia’s CAD problem.
The Government could also encourage the development of renewable energy resources, such as biodiesel, which is achievable within the next four months according to Aviliani.
Also confirming the critical state of Indonesia’s economy, Destry Damayanti, Head Economist at PT. Bank Mandiri, Tbk., affirmed the views of Aviliani by stating that the CAD problem is also responsible for the weakening IDR exchange rate against the USD.
She asserted, however, that the CAD problem cannot be solved by monetary policies alone. Policies in other sectors are also needed as Indonesia’s CAD problem has entered a chronic stage now causing structural economic problems.
“Monetary policies are not enough. Before if there were deficits, the BI rate would rise, and things would quickly return to normal. But now not only monetary policies are needed, but also policies for the real sector,” explained Destry.
Umar Juoro, member of the Supervisory Board of Bank Indonesia suggests another possible solution for the CAD problem. His solution is that the Government balance the value of imports and exports. This would eventually suppress CAD.
“Exports must be in balance with imports,” he explained.
In line with the opinions of the other economists, Umar also asserted that a contributing factor to Indonesia’s CAD problem is high oil imports. Even though he applauded the Government for raising the price of subsidized fuel, oil imports are still high and demand for fuel is not decreasing as planned.
“Therefore, the government must be firm in issuing policies to deter imports, or better yet, all private cars should use non-subsidized fuel,” concludes Umar.
(hot/kc)
Fathan Qorib, Andin Aditya Rahman
Following their recent criticism of Indonesia’s sluggish and fragile economic growth, economists continue to scrutinize Indonesia’s current account deficit (CAD). The CAD problem is seen as a potential cause of another economic crisis.
According to Aviliani, an economist from EC-Think Indonesia, the Government must immediately issue a short-term policy in order to fix Indonesia’s CAD problem, otherwise Indonesia will be hit by an economic crisis within the next 4 months.
“If the CAD remains high without a short-term policy, then in the next 4 months we will enter a crisis,” stated Aviliana in Jakarta last Monday.
One such short-term policy is to quickly reduce fuel consumption by 50 percent. According to the economist, such a step would be effective in preventing the further exacerbation of Indonesia’s CAD problem.
The Government could also encourage the development of renewable energy resources, such as biodiesel, which is achievable within the next four months according to Aviliani.
Also confirming the critical state of Indonesia’s economy, Destry Damayanti, Head Economist at PT. Bank Mandiri, Tbk., affirmed the views of Aviliani by stating that the CAD problem is also responsible for the weakening IDR exchange rate against the USD.
She asserted, however, that the CAD problem cannot be solved by monetary policies alone. Policies in other sectors are also needed as Indonesia’s CAD problem has entered a chronic stage now causing structural economic problems.
“Monetary policies are not enough. Before if there were deficits, the BI rate would rise, and things would quickly return to normal. But now not only monetary policies are needed, but also policies for the real sector,” explained Destry.
Umar Juoro, member of the Supervisory Board of Bank Indonesia suggests another possible solution for the CAD problem. His solution is that the Government balance the value of imports and exports. This would eventually suppress CAD.
“Exports must be in balance with imports,” he explained.
In line with the opinions of the other economists, Umar also asserted that a contributing factor to Indonesia’s CAD problem is high oil imports. Even though he applauded the Government for raising the price of subsidized fuel, oil imports are still high and demand for fuel is not decreasing as planned.
“Therefore, the government must be firm in issuing policies to deter imports, or better yet, all private cars should use non-subsidized fuel,” concludes Umar.
(hot/kc)