Indonesia Needs Urgent Fiscal Reform
28 August 2014 21:32 WIB
TEMPO.CO, Jakarta - Bank Indonesia Governor Agus Martowardojo has advised the government to strengthen economic fundamentals and issue a fiscal reform policy.
"Even though the financial [condition] is normal, fundamental strengthening must continue," said Agus on Thursday, AUgust 28, 2014.
Some of the measures that can be taken, according to Agus, include strengthening tax administration, limiting subsidized fuel, and export-oriented foreign direct investment (FDI). "FDI currently tends to fulfill import and domestic needs," said Agus.
He explained that now is no longer the time for low-level technology, cheap labor wage and human resource-based commodities. Agus asserted that the country's industrial sector will be able to produce high quality products if it employs high-level technology and high quality human resources.
Agus added that Indonesia is experiencing a growing number of middle-class people, and if the growing consumption rate is not accompanied with high-quality products, there will be a gap between supply and demand. "This gap will be filled by import [products]," he said.
In relation to the upcoming ASEAN Economic Community in 2015, Agus said that Indonesia has the chance to control the market because 40 percent of ASEAN economic scale is dominated by Indonesia.
Indonesia also contributes to 50 percent of the total ASEAN population. "Don't let this potential go to waste and turned Indonesia into nothing more than a market, not a player," said Agus.
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