Arrest nation's increasing misery<\/p>\n
By Omar Halim<\/p>\n
JAKARTA (JP): After the government of president Soeharto
\nsigned the second Letter of Intent with the IMF in late January,
\nthe author wrote an article in this newspaper entitled \"Economic
\nreform without misery?\"<\/p>\n
Since then, significant changes have taken place. The student
\ndemonstrations, which spread throughout the archipelago, were
\nfollowed by violent riots, particularly in Solo and Jakarta. On
\nMay 21, president Soeharto resigned and was succeeded by vice
\npresident B.J. Habibie.<\/p>\n
The departure of Soeharto may have calmed the students to some
\nextent, but confidence in the Indonesian rupiah has not returned.
\nThe extensive looting, burning, raping and killing further
\nexacerbated the situation, not only because of the resultant
\ncapital flight but also because foreign capital has become more
\nreluctant to flow into the country.<\/p>\n
Chief of the Armed Forces Gen. Wiranto has said that such
\nviolence would not be tolerated in the future. Beyond this,
\nhowever, other action has to be taken. It was stated in my
\narticle that \"...it is where the country and the economy are
\nheading in the next five years that will determine whether
\nconfidence will return. It is therefore imperative that a regime
\nwhich can elicit full trust be elected to lead the country...\"<\/p>\n
It was further argued that this regime should be able to
\nundertake essentially three types of reform: economic and
\nfinancial, political and judiciary.<\/p>\n
In the article, it was further argued that \"...with the
\nprospect of such reforms in the next five years, the country
\nwould be turned into one governed more transparently, rationally
\nand with fairness. There seems to be no doubt that confidence,
\nespecially among Indonesians, would return\".<\/p>\n
By the time President Habibie assumed presidential
\nresponsibilities, almost all groups, including those that had
\nbeen part of the old regime, had embraced the idea that the
\ncountry needed extensive reform, as the courageous university
\nstudents had demanded. Regarding the required reforms, the
\ncrucial questions now are (a) whether President Habibie's
\ngovernment is capable of taking the lead in undertaking the
\nreforms and (b) what reforms specifically should be undertaken.<\/p>\n
Earlier in June, President Habibie took the lead by announcing
\na time-table of reforms to be undertaken, culminating in the
\nelection of the new president and vice president by mid-December
\n1999. The reform measures include the revision of the electoral
\nlaw, the law on the composition of the People's Consultative
\nAssembly and House of Representatives and that on political
\nparties. Minister of Justice Muladi has also announced that other
\nlaws, such as the anti-corruption law and the subversion law, are
\nbeing reevaluated.<\/p>\n
This initiative should be welcomed. It is now incumbent upon
\nIndonesian society to respond and indicate whether the scope of
\nthe specific measures being considered are comprehensive enough
\nto reform the political, legal and judicial systems making the
\nlegislative, executive and judiciary branches of government
\nindependent of each other; for the system to be fully responsive
\nto the aspirations of the people; to make the decision-making
\nprocess transparent and decentralized; to provide a level field
\nfor all; and to enable future leaders to emerge from the
\ngrassroots level.<\/p>\n
The economic system should provide equal opportunities
\nfor all, be free of extraneous costs to enable it to compete
\nfiercely in the era of globalization, while purposefully lifting
\nthe majority economically disadvantaged groups to fully
\ncontribute to and benefit from the national wealth.<\/p>\n
For the systems to be reformed expediently, a tight schedule
\nfor discussion of the reform proposals is necessary. It should be
\nnoted that the armed forces have prepared an extensive set of
\nreform proposals covering the political, legal and economic
\nfields.<\/p>\n
For this purpose, the proreform groups which reflect the
\nopinion of the majority of Indonesians, should establish joint
\nworking groups to evaluate the government's specific proposals
\nand provide the necessary input to the government and the
\nreformed legislature.<\/p>\n
The role of the government and other national leaders in
\nfocusing the public debate is extremely crucial. Otherwise,
\npublic discussions and actions will be haphazard, unfocused and
\nunproductive. A clear and agreed upon national agenda would no
\ndoubt provide a national sense of purpose and assure the local
\npopulation and foreigners alike that Indonesia intends to prepare
\nitself to successfully face the 21st century.<\/p>\n
Meanwhile, the international community could support the
\nefforts of Indonesians by providing assistance programs such as
\nfood and medicine to ensure a stable environment so that the
\npeople could go on debating alternative reform measures and to
\nexpediently take the necessary decisions to overhaul the existing
\nsystem. The environment will not be stable if the economy, as
\nexpected, declines drastically in the coming months.<\/p>\n
In mid-May we witnessed the extensive destruction caused by
\nthe people's frustration with economic hardship and
\ndissatisfaction over the wide gap in the distribution of incomes
\nand wealth. The continuing deterioration of economic conditions;
\nbankruptcies, increasing unemployment (which is estimated to have
\nreached 20 million), soaring prices of basic commodities and
\nother goods; will all severely affect the poor, especially in
\nurban areas.<\/p>\n
\"Food riots\" could become more commonplace and seriously
\ninsecure conditions could emerge throughout the country, or at
\nleast in heavily populated areas. The reform movement could be
\nthwarted and confidence in the Indonesian economy would further
\nevaporate.<\/p>\n
This is an extremely urgent and important task. The government
\ncould formulate a two-year economic program, in which the
\npolicies and programs implemented during the first year focus on
\nreducing unemployment, launching intensive labor projects in
\nrural areas, increasing the income of the poor, increasing the
\nsupply and domestic production of food and other basic
\nnecessities, and increasing the export of goods with minimal or
\nno import content.<\/p>\n
The projects should be as labor-intensive as possible and
\ncould include the building of infrastructure in rural areas and
\nthe regions outside the island of Java.<\/p>\n
Other longer-term development projects could be postponed.
\nSince the magnitude of the problem has grown so large, the amount
\nof IMF funds during the first year, together with the
\nsupplementary multilateral and bilateral funds, should be
\nmassive.<\/p>\n
If the policies and programs of the first year were effective,
\nthe second year policies and programs could start being oriented
\ntoward more development-oriented projects.<\/p>\n
The economic and social conditions in Indonesia have
\ndeteriorated substantially in the last two months. Neither
\nIndonesians nor the international community should allow
\npolitical limbo to set in, since the cost to the nation could be
\nvery high indeed.<\/p>\n
The writer is an economic and political analyst residing in
\nJakarta.<\/p>",
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