Indonesia will not see a repeat of 1997 crisis, says president

Written by changthai11 on Tuesday, October 7th, 2008

Indonesia will not see a repeat of 1997 crisis, says president

President Susilo Bambang Yudhoyono said Indonesia would not see a repeat of the financial crisis of 1997, as all the fundamentals looked solid and there was clear potential for domestic market expansion.

Yudhoyono said the US-led global liquidity crisis would affect the country’s economy, but urged market players not to panic and to react appropriately.

Speaking to reporters after a special cabinet meeting on Monday at noon, Yudhoyono said his administration had come up with steps to mitigate impacts of the global liquidity crisis on the local economy.

After 10 years of political and economic reforms, Indonesia’s economy was back on track — as shown by continuous economic expansion for the last eight quarters and a significant improvement in debt to GDP ratio, he said.

Yudhoyono urged domestic and foreign business players to make the most of the positive momentum by further developing the domestic market amid the growing crisis, which he said would have a significant impact on demand for Indonesian products.

“Let us exploit our domestic economy. We must expand our domestic market,” he said.

One of the key initiatives to boost domestic expansion, he said, would be to increase consumption of domestically produced raw materials and goods and to reduce dependency on imports, so as to maintain a healthy balance of payments.

Yudhoyono said he would issue a special instruction demanding all government departments to focus their expenditure on growth-supporting sectors and to rely on domestic products.

He also planned to issue an incentive-disincentive scheme to promote consumption of domestic products.