JAKARTA: Talks during the World Economic Forum yesterday hinted several challenges that are still overshadowing the world economic growth, particularly for East Asian countries, which include inflationary pressure and the risk of capital flight.Economic growth and commodity price hike happen to be the key issues that must be highly anticipated by economic stakeholders, said Goldman Sachs Economist Chief for Asia Pacific, Michael Buchanan.In order to synchronize both issues, the governments and central banks must carefully manage their respective macro economy and make wise monetary policies.Economic growth in several Asian countries is relatively favorable, suiting the expectation. Yet, economic growth can boost prices, he said during yesterdays World Economic Forum of East Asian.Around 600 policy makers from government institutions, industry, academicians, international media, corporate executives are attending the annual WEF meeting on 12-13 June. It was for the first that this event was held in Indonesia.Capital outflow, Buchanan added, happens to be a shifting portfolio due to profit consideration contributed by interest rate along with an expectation on rupiah movement. A decision to raise interest rate is taken by a country's central bank to stem inflation and lower risks asset bubbling as a result of efforts to drive economic growth.Although Asia recorded a relatively solid growth, its interconnection with western world somehow makes Asia to continue to be prone. Thus, this region requires a harder attempt to mitigate financial crisis risk that may take place over the next two or three years.Fundamentally, Indonesian economy is vigorous with fiscal strength, healthy banking sector and robust industries, said Finance Minister Agus D.W. Martowardojo. Such positive accomplishment will always be maintained along with an attempt to attract foreign investors.There is no plan to hold capital control as we are willing to attract investment and direct investors portfolio to our industries, employing proper macro and fiscal policies, said Finance Minister Agus.Central bank has also thoroughly been noticing the excessive capital inflow, said Bank Indonesia Deputy Governor Muliaman Hadad. This issue relates to the capital flight risk as happened during Greeces turmoil few years ago.We lose around US$4 billion-US$5 billion that period. There was a reversal potential and it happened to be an issue faced by developing countries.Improve infrastructureIndonesia requires investment in wide ranging industries to maintain the economic growth in the upcoming years, said KRA Group CEO Karim Raslan. Indonesia needs proper infrastructure to attract investors and in the end spur economic growth and curb production cost.On the other hand, HSBC Holdings Group Chief Executive Stuart T perceived Indonesia still has a lot of opportunities to optimize insurance and pension fund to finance infrastructure development that require long-term investments.The use of insurance fund and pension to finance infrastructure development had been conducted by developed countries. Several developing countries are now taking similar measures, especially Latin America.Lack of infrastructure facilities still serve as investment barrier not only in Indonesia but also Asia, said Worldwide Managing Director McKinsey & Company Dominic Barton.Separately, Geoff Riddel, Member of the Group Executive Committee and Regional Chairman at Asia Pacific, Middle East and Afric, Zurich Financial Services, Geoff Riddell reminds the risk of economic gap amongst East Asia countries that are relatively significant.Such gap in the end will result in economic pressures such as trading limitation in food and energy sectors, etc.Besides, Riddell considers trade protectionism and subsidy distribution as counter-productive in maintaining economic growth momentum. (Sepudin Zuhri/Agust Supriadi/Rudi Ariffianto/Diena Lestari) (t02/msw)

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