| Abstraksi Narasi |
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In his 1975 New Year Address to the Nation, President Suharto offered the judgement that Indonesia had begun the year 1974 in a state of apprehension and ended in a relieved state of mind. His support for this contention was both political and economic. The political tensions of January 1974 have been controlled, and the huge inflationary pressures of the first quarter of the calendar year have abated. However, as was indicated in the Business News editorial of 3 January, 1975 `we are entering the new year while the world economic picture is very gloomy`. The editorial points out that, despite the cushion provided by high oil prices, Indonesia is by no means insulated from such problems as high costs of imports and deteriorating markets for exports. It might well have added that domestic inflation at rates well above those on world markets is a continuing cause for serious concern.
Key developments since the last survey include continued buoyant total foreign exchange earnings and reserves despite a sharp drop in non-oil earnings, a persistent large deficit on current account but large capital inflows, a relaxation of the farm price subsidy policy, the partial dismantling of the monetary control package of April 1974 in late December (in the face of a last quarter spurt of inflation), and a dramatically expanded budget for 1975/6 which was presented to Parliament by the President on January 6.
While, on balance, fiscal 1974/5 must be accounted a good year, distinct signs of economic slowdown have begun to appear. The question now arises as to whether the nation, despite its relatively favourable position as an oil exporter, and despite its vigorous policy of industrial expansion through import substitution, can maintain a satisfactory rate of economic growth in conditions of stagnation abroad and inflation at home. |
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