TEMPO.CO, Jakarta - The second package of economic policies that will be announced by the government is predicted to make little difference in decreasing Indonesia’s current account deficit. “Investors have always viewed the package as artificial—it has not fundamentally solved anything. Generally, it is only perfect at policy level, but implementation is minimal,” said an economist from the Institute for Development of Economics and Finance (Indef), Enny Sri Hartati, when contacted by Tempo, yesterday.  

Enny said the solution to decrease the deficit is to end dependence on imports of oil and gas, raw materials and food. Indef Director Ahmad Erani Yustika added that the most important thing from the policy package is the attempt to limit consumption of subsidized fuel. 

The package includes policies that cover increases in income taxes, Article 22 on Imported Goods—in order to decrease imported consumer goods—and the Import Facilitation on Goods for Export Purposes (KITE) program, meant to boost export values. 

The government claimed that the implementation of the first package has curbed the current account deficit. This can be seen from the mandatory use of biodiesel, which has reduced foreign exchange losses on imports by US$ 200 million up to November. This figure is predicted to increase to US$4 billion in 2014.