Saturday, October 28, 2006

Macro Economic Review

Indonesia has a stable economy which is expected to achieve 4.2% economic growth in 2004 and 6% growth in 2005. Increased investments are anticipated due to the low interest rates of recent years. The economy is likely to experience a rapid recovery, fitting right in with the global economy.

Construction projects—excluding roads, bridges, railway tracks, airports, seaports, and bus terminals—had been reduced since the 1997 economic crisis, but went on the upswing from 1999 to 2004. In 2003, construction projects were up 15% over the previous year. Under the new regime, expanded efforts toward infrastructural and public housing development are expected to boost the construction industry and employment. The latent construction market for 2004 was valued at about 30 trillion rupees (about \405 billion), reflecting a growth rate of 6%. Human resources are being cultivated for the development of the construction industry. The Construction Law and National Building Code ensure the maintenance of Indonesia’s technological standards as well as the quality of its structures.
The adoption of policies to expand and develop the construction industry by the central and local governments can improve the productivity of the developing construction industry and contribute to their economic growth. In 1999, the government established the National Construction Services Development Board (CSDB) and began working to develop the industrial sector through industry-government partnerships. The new regime of Susilo Bambang Yudhoyono is still adhering to the policies of the previous administration and working in collaboration with the CSDB to improve the construction industry to equip it to drive the country’s economic growth. The government and CSDB hope to establish organizations that are needed by companies, engineers, and skilled workers with regard to human resource development, technological innovation, and capital cooperation. These activities are expected to ensure a level of capacity building that will allow Indonesia to compete in global economic structures like the ASEAN Framework Agreement on Services (AFAS), the ASEAN Free Trade Area (AFTA), the World Trade Organization (WTO), the General Agreement on Trade in Services (GATS), and the Asia-Pacific Economic Cooperation Conference (APEC). (Summary, 10 th Asia Construct)

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