President Calls for the Strengthening of the Domestic Economy

Saturday, 07 March, 2009 | 11:44 WIB 

TEMPO Interactive, Bandar Lampung:President Susilo Bambang Yudhoyono is calling on people to save in order to strengthen the domestic economy. The more they save, the more funds for local investment, so that the economy will not be too affected by the world’s economic crisis. 

“If we can produce large savings, local investment will increase, and we won’t need to beg for foreign investments,” the President said, during the official opening of the Muhammadiyah Convention in Bandar Lampung yesterday. 

Based on the Savings Guarantee Institution data, people’s savings in banks up to January this year declined by 0,25 percent to Rp1.764,27 trillion compared to December 2008, which topped Rp1.768,72 trillion. 

According to the institution’s director, Firdaus Djaelani, people’s savings in banks actually increased, especially after the volume of guaranteed savings also increased as of November 2008, from a maximum Rp100 million to Rp2 billion, both in terms of savings and time deposits. 

The president hoped that people’s savings would continue to grow so that domestic investments would be stronger and Indonesia did not have to rely on foreign investment. This is because foreign investment tend to be vulnerable to fluctuations and can vanish when there is an economic crisis in the investor’s country. 

A country with an export-market orientation would be vulnerable because it is directly affected by the condition of other countries. When the destination country is suffering, the impact will immediately be felt. “Many countries are crying because the export markets have plunged,” he said. 

One example is Singapore, which is suffering from a minus growth this year because its export market is declining. As such, look to the future, Indonesia must depend on its domestic economy and market. 

The president said Indonesia has a big domestic market potential, given its 230 million population. Therefore, provinces must develop their economies because they can be a security belt during times of crisis like today. “We must strengthen the domestic economy to prevent it from falling like those of other countries,” he said. 

According to the president, the world’s economic growth, which is currently experiencing a recession, can be negative. “Next year will be tough,” he said, because exports will drop drastically, the global market will decline and liquidity, foreign exchange, and the stock market will be impacted. However, the government has set upmeasures to minimize the impact of the global economic crisis. 

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