RPT-INTERVIEW-Indonesia's vice president upbeat on economy
29 Nov 2007 00:58:08 GMT Source: Reuters
(This is a repeat of an earlier story with no change in text) By Ed Davies and Telly Nathalia JAKARTA, Nov 28 (Reuters) - Indonesia can achieve a similar growth rate to Asia's economic powerhouses, China and India, provided it fixes its ailing infrastructure and attracts more foreign investment, Vice President Jusuf Kalla said on Wednesday. Southeast Asia's biggest economy is set to expand 6.3 percent this year, its fastest growth in 11 years, but still lags far behind China, which is set to grow 11.5 percent this year, and India, which is heading for 9 percent growth in its fiscal year. "We can achieve that" kind of growth rate, Kalla told Reuters in an interview, as Indonesia plans to improve infrastructure such as roads, ports, and transportation, and provide "good regulation for investors". President Susilo Bambang Yudhoyono was elected in 2004 on the back of promises to tackle corruption, boost growth, and create jobs. Kalla said the government was tackling impediments to growth such as corruption and investor-unfriendly labour laws. "This is a transition period," said the wealthy businessman, who comes from Indonesia's Sulawesi island. With a presidential election due in 2009, Kalla is already seen as a potential opponent to Yudhoyono rather than his running mate. When asked whether he would run with or against Yudhoyono, Kalla said: "this question will be answered in 2009. It is not my personal decision only but this is a party decision." But Kalla, who heads the dominant Golkar party in parliament, did not rule out standing for president. "Anything is possible." Kalla gave an upbeat assessment of the economy, shrugging off recent weakness in the rupiah currency <IDR=>, which has been partly blamed on concerns about the impact of high oil prices on the economy and the high cost of government fuel subsidies. The rupiah fell as low as 9,422 per dollar on Wednesday, from around 9,100 at the beginning of November. "The central bank will take care of it," he said. "Between 9,300 and 9,500 they usually intervene." WORLD RESPONSIBLE FOR FORESTS Kalla, who expressed confidence the economy could meet a government growth target of 6.8 percent next year, said there was no plan to cut or reduce fuel subsidies, politically sensitive in Indonesia. Cuts in the level of subsidy have led to riots in the past, and analysts say that with elections slated for 2009, it is unlikely the government will cut subsidies. Finance Minister Sri Mulyani Indrawati said on Tuesday that energy subsidies could hit 88.2 trillion rupiah ($9.37 billion) this year, well above the 55.6 trillion rupiah allocated in the 2007 budget. On nuclear energy, Kalla it was not a "not a big issue for us", citing a lack of budget, safety worries, and Indonesia's preference for other energy sources such as geothermal and hydropower. Indonesia has said it wants to build its first nuclear plant by 2016, drawing ire from environmentalists worried about a nuclear accident given the country's frequent earthquakes. Kalla said that it was right for Indonesia, which has about 10 percent of the world's tropical rain forests, to press richer nations to help pay to retain forests to reduce global warming. Indonesia, which will host a UN climate change meeting in Bali next month of about 190 nations, is backing a scheme that aims to make emission cuts from forests eligible for carbon trading. Experts estimate Indonesia could earn more than $13 billion by preserving its forests if the plan gets support in Bali. "All the people of the world should be responsible," said Kalla, referring to the exploitation of Indonesian timber by richer countries around the world. ($1=9,413 rupiah) (Editing by Sara Webb and Jerry Norton)
