Hendarsyah Tarmizi – This year's results indicate that the government has been able lay down more solid foundations on which the economy can grow further. But, for many people, this achievement will not be enough.

Some politicians and economic observers say that the government has failed to solve the growing unemployment and poverty problem.

Siswono Yudohasodo, the chairman of the Indonesian Farmers' Association (HKTI), for example, said the number of unemployed and poor people had not changed much since President Bambang Susilo Yudhoyono and Vice President M. Jusuf Kalla took power four years ago.

Although the economy has improved during the last four years, the number of people living under the poverty line remains high at between 34 million and 50 million, said Siswono, the running mate of presidential candidate Amien Rais, who ran against the Susilo-Kalla ticket in the 2004 presidential election.

Siswono said that the number of openly unemployed also remained high at 10.6 million, or 9.8 percent of the total population as of June this year. This figure, according to Siswono, is relatively unchanged from 10.9 million, or 10.3 percent in 2005.

The government has, in fact, introduced a number of programs to cope with the unemployment and poverty problems. The last measure was issued in June as a part of an economic package to stimulate economic growth by such things as improving the investment climate, speeding up infrastructural development and strengthening small and medium enterprises.

With the economic packages, the government hopes that economic growth will reach 6.3 percent this year and 6.9 percent in 2008, and that the unemployment rate will be reduced to between 8 percent and 9 percent next year.

According to the government, the open unemployment rate dropped to 9.7 percent (10.5 million) in early 2007 from 10.44 percent (11.1 million) at the of 2006.

With the improvement in economic growth and the decline in the unemployment rate, the government is optimistic that the number of poor people will be reduced from 17.75 percent in 2006 to between 15 percent and 16.8 percent in 2008.

In order to achieve this target, the government also plans to divert up to Rp 30 trillion (about US$3.3 billion) in routine spending from the 2008 budget to capital expenditure.

This higher spending on infrastructure is expected to help create more jobs, which in turn will provide higher earnings for the poor.

Unfortunately, the much-waited economic packages could not be implemented due to the lack of technical guidance on how the government agencies involved should carry out the programs.

With the improvements in economic fundamentals, the government has laid important foundations for creating faster and more solid economic growth in the coming years.

However, to be able to do this, the government will need to place more focus on the implementation of its economic policy and remove the legal uncertainties in many economic fields.

It will not be easy, but if the government can do it, regaining the high economic growth rates with low inflation we enjoyed prior to the financial crisis in late 1997 will no longer be out of reach.