Mandiri Sekuritas Key take away from dinner gathering with Finance Minister

We attended dinner gathering with Finance Minister Agus Martowardojo as the guest speaker. Here are some of the key take away:

􀂄 The government commits to provide fiscal stimulus in order to finance economic expansion. Yet, fiscal deficit is likely to be kept at 1.7% of GDP in 2011 to have a healthy and sustainable fiscal policy. The 2011 deficit level is higher than expected budget deficit realization in 2010 of 1.5% of GDP.

􀂄 The minister acknowledges the main challenge would be slow infrastructure development. To this front, he believes Indonesia, currently, is more ready to accelerate the development through Public Partnership (PPP) framework. Private participation is needed since the government can only finance around 36% of total infrastructure spending (Rp1,400tn) in the next five years.

􀂄 Besides providing government guarantee and infrastructure financing support on infrastructure projects, he also expects that a new land acquisition for public usage bill will be issued this year. The bill would help accelerating the infrastructure development.

􀂄 The government considers providing tax holiday to certain downstream industries, particularly palm oil, chocolate and rubber as well as to companies investing in basic industries.