RI must revamp seriously to gain investment grade

JAKARTA: Standard and Poors (S&P) suggests Indonesia to seriously revamp several sectors like the economy, politics, and institution in order to secure investment grade status.An economist of Samuel Sekuritas, Lana Soelistianingsih, said that Indonesia
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News Editor - Bisnis.com 09 Desember 2010  |  10:15 WIB

JAKARTA: Standard and Poors (S&P) suggests Indonesia to seriously revamp several sectors like the economy, politics, and institution in order to secure investment grade status.An economist of Samuel Sekuritas, Lana Soelistianingsih, said that Indonesia has been eligible for rating upgrade based on S&Ps assessment. Yet, to obtain the status, Indonesia should embark on serious revamption on several sectors.The assessment confirms positive factors, namely stable develoment in macro and politics, also decreasing ratio in debt to Gross Domestic Product (GDP). With recently assigned BB+ rating, Indonesia has a great opportunity to reach investment grade, which will highly depend on three points, i.e. economic, political, and institutional sectors, he wrote at the corporate site, on Tuesday.Besides, Lana added, S&P reported weaknesses that restrain RI to reach to the investment grade include weak bureaucracy and institution compared to those implemented in other BBB- rated nations. That is indicated by lack of check and balance system, changeable legal system, corruption, inconsistent policies and regulations between central and local governments, as well as difficult business environment.Moreover, Indonesia is also considered having investment struggles, inflexible laborr market, inadequate infrastructure and electricity, and high portion [around 57%] of public foreign debt, she said.However, Lana Soelistianingsih believed S&Ps negative assessment not to persuade Moodys & Fitch Ratings assessments which are considering a rating upgrade for Indonesia. (T01/NOM)

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Editor : Muhammad Fariz Aulia

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