Economic Gap Continue on Economic Risk, Poor Innovation: Minister

Malang, E Java (Antara) - Finance Minister Sri Mulyani Indrawati said economic gap in Indonesia has continued to widen on accumulation of factors such as economic risks and poor innovation.

"In addition there are limited production capacity, lopsidedness in infrastructure, technology and skills of the people, Sri Mulyani said here on Wednesday.

The lopsidedness causes low productivity and weak  competitiveness resulting in poverty and wider imbalance, she said after giving a lecture at the Muhammdiyah University of Malang (UMM) here.

On the contrary, the country's economy grew stronger, she said pointing out the period of 2006-2015, Indonesia recorded an annual average  growth of 5.7 percent placing Indonesia the third after India and China in the world.

Therefore, the biggest challenges in sustaining the economic growth in the future, are to improve education, capability and skills of human resources, she said.

Simple example, she said, in studying state finance, students could learn from ways of managing personal finance, as management of state finance is not much different from management of personal finance. The difference is only in scale, she added.

"Students could learn how to spend if income is smaller than requirement. As is in handling state finance, we must learn to be efficient, and effective in spending," she said.

She said the global economic situation at present, which is full with uncertainties, instead of a setback, could serve as an opportunity for Indonesia to be mature and advance.

Among potential global risks are weak demand, low commodity prices, geopolitical issues, U.S. economic policy under new government, she said.

The government, both the center and the regions must be able to maintain the economic growth momentum to eradicate poverty and plug up the gap and create more jobs, she said.

The state budget must be seen as a fiscal instrument to drive economic growth, she went on.

"The 2017 state budget has been prudently drafted. It is important as we have to maintain the momentum of the economic growth of the country with  prudence to forestall the impact of global economic uncertainties," she said.

The minister was here also to commission Tax Center and Corner of the Indonesian Stock Exchange (BEI) UMM.

The Tax Center UMM has run since 2013, established through cooperation between the Taxation Directorate General and the Economic and Business Faculty of the Muhammdyah University.

Tax Center UMM serves issuance of tax payer registration number (NPWP), facilitates tax payment and tax consultancy.(*)