By Dicky Kristanto
JAKARTA, May 20 (Reuters) - Indonesia's president said on Wednesday that if he was elected for a second term his government could improve the investment climate to lift economic growth to 7 percent, while ensuring that the poor were protected.
The economy is set to be the key issue in the July 8 presidential vote, where reform-minded President Susilo Bambang Yudhoyono is standing against his vice president, Jusuf Kalla, and opposition leader Megawati Sukarnoputri.
Yudhoyono denied that his administration was too pro-market after criticism from some Muslim and nationalist groups of his choice of running mate, former central bank governor Boediono.
"They think it means surrendering everything to the free market, surrendering everything to multinational corporations, to the IMF ... that's not our choice," Yudhoyono told a forum hosted by the Indonesian Chamber of Commerce and Industry.
"The government needs to intervene so we can protect the weak."
Under Yudhoyono, Southeast Asia's biggest economy has had its strongest growth in a more than a decade and has avoided recession during the global downturn, unlike some of its more export-reliant neighbours.
"If elected again, I will work hard so that by 2014, the end of the next five-year administration, we can reach a growth rate of 7 percent," Yudhoyono said.
"It's not the fastest pace of growth that we want to achieve, but an inclusive, sustainable and broad-based growth, which in the end should help protect the poor."
The government has forecast growth to slow to 4-4.5 percent this year, against 6.1 percent growth last year, but still higher than many other Asian countries.
The president said: "We are at the beginning of the end of the crisis" and said inflation should fall to below 6 percent at the end of the next five years.
Annual inflation eased to 7.31 percent in April, the lowest since December 2007 when it was 6.59 percent. The government expects annual inflation to ease to 6 percent at the end of 2009.
Yudhoyono promised to improve the investment climate by spending 10 percent of the budget on infrastructure and pushing for a change in culture -- but not job cuts -- in the country's lumbering bureaucracy.
Yudhoyono said he was not opposed to some protectionism in the economy but added: "We don't protect indiscriminately."
On Monday, Kalla, who is chairman of Golkar, the party machine of former strongman president Suharto, presented a more nationalistic, protectionist platform to the same forum.
"I, along with Wiranto and all of you, want to develop an independent nationalist economy," he said, referring to his running mate, former general Wiranto.
Taking aim at foreign economic ties, Kalla also described as unfair a contract to sell liquefied natural gas to China from the BP-led Tangguh project in Papua, eastern Indonesia.
"Tangguh, the wealth of Papua, was sold for cheap," he said. Megawati is due to give her economic platform on Friday.
Yudhoyono's approval rating in a recent poll of 67 percent, against 12 percent for Megawati and 2 percent for Kalla, makes it almost certain he will win a second term, bar some unexpected blow. (Additional reporting by Olivia Rondonuwu)
(Writing by Sunanda Creagh; Editing by David Fox)