Increasing Chinese Investment After The Start Of The Free Market

Free Market in Indonesia came into effect beginning in January 2010 where the realization of investments from China to Indonesia increased after implementation of the Free Trade Agreement (FTA) ASEAN-China which entered into force earlier this year. "The average investment of U.S. $ 50 million per year from 2005 to 2009.

Before the implementation of the ASEAN free-market-China, investment from China to Indonesia of U.S. $ 16 million per year from 2000 to 2004. Investment from China to Indonesia industry sectors including textiles, wood, basic chemicals, food, metals, and transportation.

With the free market trade in Indonesia is expected to be stable again as happened before the first financial crisis of 1998, with the free market is Indonesia-China cooperation will be formed substantially in the field of trade in various fields.

READ MORE - Increasing Chinese Investment After The Start Of The Free Market

Indonesia's Economic Recovery in 2010

Economy in Indonesia could be said the country is still below average asean countries like Malaysia and Singapore, but in economic development since the economic crisis of 1998 until now still no significant progress only in the dollar exchange rate was fixed at the level range between $ 1 Rp. 9000 s / d 10,000

Indonesia's economy in 2010 is predicted to grow 5.7 percent, higher than the 2009 that only 4.4 percent. However, growth was very dependent on short-term speculative funds, high-interest debt, and rising commodity prices. Completion problems Century bank bailout key to restoring confidence that Indonesia consistently enforce the law. "Another obstacle is the low competitiveness.

Economic growth predicted in 2010 that 5.7 percent, relatively low compared to its potential. In addition, the growth of low quality because it encouraged consumption, high commodity prices, high-cost debt, a flood of short-term speculative funds, and hot money. Export performance is expected to grow 9 percent, but only predominantly primary commodities such as oil and gas, coal, and metals.

Free trade

With the enactment of the ASEAN Free Trade Agreement, China, will be the acceleration of consumption goods imports. "De-industrialization and encourage continued growth slowing imports and raw materials. Acceleration of de-industrialization and the increasingly intense competition in the free market era of ASEAN-China will hamper recovery of various economic sectors. This is because the issue of competitiveness. "To build a competitive industry needs infrastructure improvements, building processing industry and production components, interest rates and the exchange rate do not be too strong, increase your productivity.

Indonesia's decision not to accelerate the liberalization of the economy followed by preparation for entering the competition is getting tight. In fact, all countries that have succeeded in building a competitive and productive industry, strategy and industrial policy became one of the prerequisites required. It was a reference to the major industrial development and preparation of supporting industries, which became the basis of government in a long term cooperation. "Without any reference, the sequence will occur many the wrong policy priorities. The decision put the liberalization of the financial sector, without waiting for the readiness of the real sector is one step. "Fluctuation of financial indicators will interfere with the performance of the real sector. Will Indonesia in 2010 was recovering economy? we wait the government's performance in economic recovery in 2010.

READ MORE - Indonesia's Economic Recovery in 2010

Indonesia's Economy Will Grow 7% in 2012

Indonesia is a developing country where the level of Indonesia's economic growth this year expected to be much faster to 5.5%. This figure could reach 6.5% in 2011 and 7% in 2012. Chief Economist & Group Head of Global Research of Standard Chartered Bank (SCB), Gerard Lyons submit estimates of economic growth in the next three years in a seminar "A Post Crisis World: Implications for Asia". Asia will lead the global recovery in 2010. Global growth will experience a rebound from the 2.9% depreciation of 1.9% in 2009

According to Senior Economist SCB Indonesia, the Indonesian economy is relatively more resilient against a global recession in 2009. This is due to a large domestic market and commodity prices high international export. As the GDP fell from 6.1% in 2008 to around 4.4% in 2009, its growth rate reached the third highest among the G20 countries after China and India. While the rupiah currency gained 16% or ranked fourth in the world's biggest and best improvement in Asia. Medium Composite Stock Price Index (JCI) rose 123% or to show the performance of third place in the world and the best in Asia.

READ MORE - Indonesia's Economy Will Grow 7% in 2012

Bank Indonesia Decrease Interest Prepare Credit Policy

One policy that will be prepared by the Bank Indonesia (BI) is about the decline in bank loan rates. This policy was made because the bank lowered interest rates only average credit 85 basis points (bps) does not comparable to the decrease in BI benchmark rate (BI-rate) of 300 bps.

"Later there was a policy that leads to it all (a decrease of credit interest), now we're studying," said Director of the Directorate of Banking Research and Settings Halim Alamsyah, in Jakarta, Friday. According to Halim, BI will examine several factors that make high bank operating costs, making it difficult to lower credit rates. He emphasized that the policy will have components that will be limited and stressed the bank efficiency. "Banks are not efficient would be to offer higher interest rates," he said. In addition, Halim said, BI is still continuing the present plan of implementation of the single policy (SPP) or a single bank ownership rules, particularly for state-owned banks.

In complying with the rules of this SPP, the Ministry of SOEs will realize the option of Bank Holding state formation after the year 2009 or post-general election in order to avoid suspicions of political nuance. Halim also said that the application of fees in 2010, but for this state-owned banks will be extended because the process is quite time consuming, especially in relation to consultation with the House.

Credit excitatory

Meanwhile, the BI policy regarding plans to change the minimum mandatory checking rules (GWM), economist of Bank CIMB Niaga Winang Budoyo said, was simply in order to stimulate the credit distribution. Thus it can be a positive point for the banking industry.

BI previously expressed will provide incentives for banks GWM decrease the active credit channel, while the banks that use the funds invested in debt securities will be raised GWM it. According to Winang, GWM reduction incentives will make larger banks in channeling credit to the community. With the decline in mortgage interest policy is expected to medium business sector will come back down crowded.

READ MORE - Bank Indonesia Decrease Interest Prepare Credit Policy

Predicted Economic Growth in 2010 Year's 5.7 Percent

Economic growth of a country is calculated based on the end of the year and predicted at the beginning of the year according to the prediction In 2010, estimated that the Indonesian economy would grow 5.7 percent. Economic growth rate is higher than the year 2009 that only 4.4 percent. But the economic growth rate was relatively low compared to its potential, and is projected to return to low quality.

ECONIT report, the institute of economic studies, on "Economic Projections 2010: Year of Determination", in a roundtable discussion held on Thursday (14/1/2010), at the Hotel Sultan, Jakarta. Economic observers from ECONIT Rizal Ramli to explain, as in 2009, the Indonesian economy will be driven back to the short-term speculative funds and high-interest debt (hot money and high-cost debt) and rising commodity prices.

In addition, Indonesia's economy will experience a slow recovery with the quality of growth is also low. "Economic recovery is highly dependent on hot money and high-interest debt and commodity prices, would make Indonesia's economy becomes very fragile in 2010," he said. Rizal added that Indonesia's economic growth in 2010 is predicted to reach 5.7 per cent will be achieved with almost the same strategy last year that encouraged private consumption, commodity prices, high-cost debt, and the influx of hot money.

Trade and agriculture sector is expected to grow higher than the year 2009. One of the two drivers of growth this sector is the world's economic recovery and rising trend in commodity prices. "The trend of export of raw materials and raw materials to China and India also become drivers of growth in agriculture and trade," said Rizal. The construction sector is also expected to grow significantly. Executive Director Hendri Saparini ECONIT added, to meet the target budget deficit financing in 2010 and sustaining macroeconomic indicators, the government will again maintain high interest rates. It is estimated, will SBI rate of 8-9 percent in 2010. High interest rate policy will also be maintained to anticipate higher inflation expectations, the threat of weakening exchange rate and to resist the wave of capital outflow. Inflation in 2010 is estimated at 6-7 percent.

READ MORE - Predicted Economic Growth in 2010 Year's 5.7 Percent