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President Yudhoyono Announces Policy Package
Friday, 02 September, 2005 | 20:13 WIB

TEMPO Interactive, Jakarta:Indonesian President Susilo Bambang Yudhoyono has announced a policy package to help deal with the current economic situation, including increasing fuel prices after October.

In a speech made at the State Palace on Wednesday afternoon (31/08), President Yudhoyono did not mention the exact timing, only that fuel prices would be increased.

“During the months of September and October, we will first settle payment of compensation in relation to the fuel price increases on March 1,” he stated.

During these two months, Yudhoyono said, the government would prepare the actual form of the next compensation.

What was certain, he said, was that subsidies for rich people must cut out as soon as possible.

The policy package announced covers the energy, monetary, fiscal and investment sectors.

The President said that the two main problems facing the Indonesian economy were increasing oil prices and the weakening Rupiah.

As regards the monetary sector, Yudhoyono said that Bank Indonesia (BI) has already issued several policies by increasing the interest rate and minimum checking account.

For other policies, members of the general public are requested to wait for further announcement from the central bank.

In the fiscal sector, the government has already determined three financing sources to cover the current deficit, which is assumed to have increased to Rp48.3 trillion, although a figure of Rp26 trillion was allowed for.

Three measures that will help cover the deficit are the issuing of state and international bonds, carrying out the privatization of state-owned enterprises and foreign capital divestment as well as both bilateral and multilateral foreign loans.

As regards the investment sector, the President has requested that investment licensing procedures be made easier. (Dimas-Tempo News Room)