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Indonesian leader makes call for unity

China Daily Global | Updated: 2022-08-18 09:53
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In key speech, Widodo stresses need for vigilance during global turmoil

Dancers perform during celebrations for Indonesia's 77th Independence Day at the Merdeka Palace in Jakarta on Wednesday. WILLY KURNIAWAN/REUTERS

JAKARTA-Indonesian President Joko Widodo on Tuesday called on his compatriots in a State of the Nation address to remain united, vigilant and alert as they face crises fueled by the conflict in Ukraine and the pandemic.

After two years of remote meetings amid COVID-19 restrictions, more than half the members of Indonesia's Parliament were in attendance as Widodo told them on the eve of Independence Day that regional tensions are threatening security.

"We must always remain vigilant, cautious and alert," Widodo said. "Crisis after crisis still haunts the world."

He noted that when the Ukraine crisis caused energy and food crises, the world was still grappling with the health and economic impacts of COVID-19. Some countries are predicted to go bankrupt, while over 550 million people face extreme poverty and 345 million others face food shortages and famine, Widodo said.

"The challenges are not easy for the world and for Indonesia. We must face those challenges with prudence and vigilance," he said.

Widodo said Indonesia has set a target for economic growth of 5.3 percent next year, with inflation expected at 3.3 percent.

The growth figure is based on economic dynamics, the development agenda, and future challenges, he added.

"We will try our best to maintain the sustainability of strengthening the national economy," he said.

Indonesia is pushing for expanded production while opening up investment and employment opportunities to achieve the economic growth target.

Inflation in July was recorded at 4.94 percent year-on-year, a relatively moderate figure, in line with the country's success in controlling the pandemic and economic recovery, Widodo said.

The president said state spending is being directed to address anticipated external inflationary pressures, particularly in the energy and food sectors.

The Ukraine crisis has exacerbated a trend of rising prices in Indonesia amid the supply chain disruptions from the pandemic, causing cooking oil prices to soar. Disruptions in the transport of wheat, soybeans and corn have led to higher prices for many food types.

In April, Indonesia banned exports of crude palm oil, a key ingredient in cooking oils, for a month amid a series of student protests against skyrocketing food prices. Indonesia and Malaysia are the world's largest exporters of palm oil, accounting for 85 percent of global production.

Indonesia's inflation rate has been relatively modest with the shock being mostly absorbed through a budget bolstered by energy subsidies.

Widodo said the state budget recorded a surplus of 106 trillion rupiah ($7.2 billion), allowing the government to provide fuel, gas and electricity subsidies of 502 trillion rupiah this year to cushion fuel prices.

However, he said the administration must recalculate its energy subsidies to reduce the burden on the budget.

Southeast Asia's largest economy has served as a key exporter of coal, palm oil and minerals during a global shortage in commodities. Coal exports increased to record levels in March after a brief ban on its shipments early this year to secure domestic supplies.

The Association of Indonesian Automotive Industries said on Monday that the country recorded sales of 86,256 cars in July, an increase of almost 10 percent from June.

Agencies via Xinhua

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