KONTAN.CO.ID - JAKARTA. The Indonesian economy expanded by 5.27 percent year-on-year (yoy) during the second quarter of 2018 thanks to strong growth in consumption, Central Statistics Agency (BPS) announced recently, as reported by The Jakarta Post. The report continued that the latest figure was better compared to this year first quarter’s growth of 5.06 percent yoy and also 5.01 percent booked in the second quarter of 2017. Currently, investment is the second-largest contributor to GDP growth. Exports, meanwhile, another national economic growth booster, grew 7.7 percent in the second quarter. Indonesia’s export-oriented sectors still have a lot of untapped potential. In boosting these sectors, though, policymakers have to come up with proper currency-hedging strategies as well as policies strengthening local industrial sectors so as not to upset the stability of national foreign reserves.
- Providing incentives to financial service firms that channel loans to export-oriented industrial sectors, import substitutionproducingindustrial sectors as well as the tourism sector. These incentives include prudential regulations like core capital provision and asset quality risk protection.
- Revitalizing the role of the Indonesian Export Financing Institution, shifting the institution’s focus toward financing export-oriented industrial sectors, while boosting the institution’s role as a hedging instrument provider for export transactions and reassurance provider for export-related insurance schemes.
- Facilitating the capital market to finance the development of the 10 strategic national tourism sites outside Bali.
- Facilitating the provision of people’s business credits to finance the development of small-to-medium enterprises working in tourism, in cooperation with the Office of the Coordinating Economic Minister.
- Adjusting the banking sector’s prudential procedures, such as risk-weighted assets to finance the housing sector. This policy also comprises erasing land management credit provision for residential complex developers, as well as unburdening them from the obligation to conduct collateral valuation to decrease their loan loss provisions.
- Stimulating the growth of financial technology startup companies, including equity crowdfunding platforms, considering these platforms’ significant role in providing access for small-to-medium enterprises — which contribute a great deal to national GDP — to get bigger capital injection, while still emphasizing consumer protection principles.
- Facilitating the capital market in maximizing its role in developing various instruments such as asset securitization, regional and green bonds, sharia-based financial instruments, hedging instruments as well as blended financial instruments. The OJK will also expand its domestic investor domains by strengthening the role of regional stock exchange companies.
- Mandating financing institutions to channel a certain portion of their funds to the productive industrial sectors.