Indonesia targets up to 7.7% growth

Southeast Asia's largest economy is expected to expand over 6 percent this year, and the solid growth combined with increased political stability is attracting strong foreign capital inflows to its bonds and stock market.

“In 2014, the government is targeting economic growth of 7 to 7.7 percent. Through good planning and correct implementation, we are optimistic we can reach that target,” Yudhoyono said in his speech to parliament ahead of Independence Day on Aug. 17.

“The time has come for us to no longer be a caged tiger but a nation that is competitive on the international stage.”

Yudhoyono said in the speech he will amend laws to improve infrastructure development, and reiterated he was committed to tackling graft, bureaucratic reform and good governance.

Yudhoyono was re-elected last year to a second five-year term on promises to boost economic growth by cleaning up corruption, speeding up infrastructure development and reforming the sluggish civil service.

But he has been slow to deliver results and has failed to wholeheartedly support his top reformers against the corrupt political and business elite, proving a disappointment to many ordinary Indonesians.

Yudhoyono failed to defend his top reformers — the former finance minister, Sri Mulyani Indrawati, and the vice president, Boediono — vigorously enough over their decision to bail out a small lender, Bank Century.

The prolonged politicking by members of his own coalition exposed rifts within his government and his inability to exert control over key coalition members, and distracted the government from pushing ahead with reforms and passing legislation.

Since its inauguration, Yudhoyono's second-term government has passed only a handful of bills, none of which address the issues investors see as most urgent: labor law reform, clean governance and bureaucratic reform.

He said that in the next four years, the government is targeting the creation of 10.7 million new jobs, as well as reducing the poverty level to around 8-10 percent.

Yudhoyono is due to deliver a second speech on the 2011 budget priorities later today.

Yudhoyono's speech was full of the challenges he faces, from attracting enough investment to ensuring regional governments spend their budgets to stimulate growth.

“We must push bureaucratic reform, until all our state employees become agents of change and create good governance,” he said.

“We must encourage infrastructure development, which honestly, is still lacking.”

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