TEMPO.CO, Jakarta - The National Development Planning Ministry believes that the realization of government programs in the second semester will boost the economy, including business, and reduce unemployment to the 5.6 percent target.
"Transactions and capital spending will soar in the second semester and will expand employment opportunities. We are still optimistic," said Andrinof Chaniago, the minister of national development planning and the head of the National Development Planning Board (Bappenas), in his office on Friday.
Although the economy witnessed a slowdown in the first semester, the situation will turn around in the second, he affirmed.
To reduce unemployment, the minister pointed out that certain issues must be made priorities, including investment for labor-intensive projects and industrialization in regions to create new business sectors.
Moreover, he emphasized that factors that hindered growth in the first semester, such as the slow execution of government programs and projects, must be thoroughly overcome.
Chaniago also asserted that government capital spending will double from that last year because they will begin to feel the benefits of relocating subsidy budget to productive sectors.
"We must be optimistic. With regard to budget spending, a ministry could absorb 70 percent of it within two months last year," he remarked.
Furthermore, General Chairman of the Indonesian Chamber of Commerce and Industry Suryo Bambang Sulisto had cautioned earlier that if government capital spending remained slow, there would be higher chances of businesses conducting layoffs.
The realization of budget spending is needed to expand the economic activities of private and public sectors, such as the implementation of projects that would need more workers.
According to data from the Central Bureau of Statistics, open unemployment in the country increased since February, from 5.7 percent to 5.81 percent of the total workforce recorded at 128.3 million.
The government has set a target of bringing down unemployment to 5.6 percent in 2015 and to a range of 5.2 to 5.5 percent in 2016.