Indonesia rises from ranks of poor

Press, 18 May 1982, Page 8

Indonesia rises from ranks of poor

NZPA-Reuter Jakarta Indonesia, which has weathered relatively successfully the world recession, has entered the ranks of the middle-income group for the first time, according to the World Bank. The most populous Muslim country and Asia’s only O.P.E.C. member, Indonesia, will have to struggle to maintain its vital development programme, the bank said in a confidential report supplied to a group of Western aid donor countries this week-end.

Despite a current-account deficit of SUS2.S billion in 1981-82, the report said, “the Indonesian economy has performed remarkably well in the nast "ear. fuelled by

continued strong investment outlays in both the public and private sectors and by yet another record rice harvest. “G.N.P (gross national product) per person rose to SUSS2O in 1981, thereby placing Indonesia firmly in the ranks of the middle-income countries for the first time,” it said. “Indonesia is one of the few oil-exporting developing countries which has succeeded in developing its nonoil economy to the point where the growth momentum is not immediately threatened by the current weakening of the international oil market,” the bank said.. The world body advised Jakarta not to consider im-

port restrictions or higher tariffs to balance its payments as such a policy would foster inefficiency, create inflationary pressures, and jeopardise economic growth prospects.

Last year’s balance of payments deficit’, compared to.a $2.5 billion surplus in 1980-81, underscored the urgency of continued restructuring of the economy away from over-dependence on oil, it said.

On the negative side the bank noted that “inadequacies in basic infrastructure — power generation and transmission, transport, communications and storage — are increasingly serious constraints to continued rapid development.”