REPUBLIKA.CO.ID, JAKARTA -- The government should not rely on foreign countries to boost growth but should instead focus on improving the domestic economy at a time when the rupiah was weakening against the US dollar, an economist has said.

Indonesia can no longer rely on the weakening global commodity prices and the Chinese economic recovery, Martin Panggabean of the Indonesia Green Investment Corporations (IGICo) Advisory said in a press statement released on Wednesday.

"(Neither can it rely on) the Fed which insists on increasing its interest rate at the end of this year. Instead, it should immediately improve the domestic economy," he said.

According to him, the market expectation will not improve if the Indonesian economy does not show signs of rebounding.

"The rupiah's exchange rate continues to slide closer to Rp15,000 per US dollar, and the prices of state debt securities and bonds have not been improving, while the Fed will still increase its interest rate at the end of this year. So these problems may continue to burden the Indonesian economy, particularly the banking sector," he said.

Martin suggested that the government should immediately continue with its infrastructure projects that are high on the list of its priorities and implement several policies aimed at deregulation and cutting down on bureaucratic red tape. It must consistently stick to achieving its targets in this regard.

Hopefully, the projects will lead to an improvement in the people's purchasing power and encourage the economy to become robust.

He added that the rupiah's exchange rate against foreign currencies should be safeguarded as it has reached an alarming level.

"The public's low expectations of economic prospect is reflected in the exchange rate. On the other hand, Bank Indonesia and the government should help keep up the expectation lest things get worse. Intervention is needed but it must maintain foreign exchange reserves, too," he said.

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