INDONESIA SEEN AT CROSSROADS OVER ECONOMIC CHANGE Indonesia appears to be nearing a political crossroads over measures to deregulate its protected economy, the U.S. Embassy says in a new report. To counter falling oil revenues, the government has launched a series of measures over the past nine months to boost exports outside the oil sector and attract new investment. Indonesia, the only Asian member of OPEC and a leading primary commodity producer, has been severely hit by last year"s fall in world oil prices, which forced it to devalue its currency by 31 pct in September. But the U.S. Embassy report says President Suharto"s government appears to be divided over what direction to lead the economy. "(It) appears to be nearing a crossroads with regard to deregulation, both as it pertains to investments and imports," the report says. It primarily assesses Indonesia"s agricultural sector, but also reviews the country"s general economic performance. It says that while many government officials and advisers are recommending further relaxation, "there are equally strong pressures being exerted to halt all such moves." "This group strongly favours an import substitution economy," the report says. Indonesia"s economic changes have been welcomed by the World Bank and international bankers as steps in the right direction, though they say crucial areas of the economy like plastics and steel remain highly protected, and virtual monopolies. Three sets of measures have been announced since last May, which broadened areas for foreign investment, reduced trade restrictions and liberalised imports. The report says Indonesia"s economic growth in calendar 1986 was probably about zero, and the economy may even have contracted a bit. "This is the lowest rate of growth since the mid-1960s," the report notes. Indonesia, the largest country in South-East Asia with a population of 168 million, is facing general elections in April. But the report hold out little hope for swift improvement in the economic outlook. "For 1987 early indications point to a slightly positive growth rate not exceeding one pct. Economic activity continues to suffer due to the sharp fall in export earnings from the petroleum industry." "Growth in the non-oil sector is low because of weak domestic demand coupled with excessive plant capacity, real declines in construction and trade, and a reduced level of growth in agriculture," the report states. Bankers say continuation of present economic reforms is crucial for the government to get the international lending its needs. A new World Bank loan of 300 mln dlrs last month in balance of payments support was given partly to help the government maintain the momentum of reform, the Bank said.