Businessmen hail Habibie's speech<\/p>\n
JAKARTA (JP): Local businessmen hailed the four-point economic
\nstabilization and reform program delivered by President B.J.
\nHabibie in his first state of the nation address at the House of
\nRepresentatives Saturday.<\/p>\n
But they said more concrete action was needed to regain the
\nhard-to-obtain confidence in the shattered economy.<\/p>\n
Indonesian Chamber of Commerce and Industry (Kadin) chairman
\nAburizal Bakrie said Habibie's economic measures to revive
\nconfidence in the economy were very clear.<\/p>\n
"I'm sure that they will soon create a better investment
\nclimate in Indonesia," he said.<\/p>\n
Habibie said in his speech that restoring confidence was the
\nkey to lifting the country out of its worst crisis in three
\ndecades.<\/p>\n
Although confidence and support from overseas governments and
\ninstitutions had been strong as reflected from the US$14 billion
\nin international aid committed for the current fiscal year,
\nprivate investor confidence had yet to return, he said.<\/p>\n
"I hope that domestic investors will play a role in the return
\nof private investment," he said, pointing out that if confidence
\nwas restored, the rupiah's exchange rate would settle at a more
\nsuitable level, which would ease the pressure on prices and
\ninflation and finally lower interest rates to regenerate the real
\nsector.<\/p>\n
Habibie, who came to power on May 21, explained that his top
\npriority was to restore confidence by reviving the battered-
\nbanking sector.<\/p>\n
Other priorities are the resolution of the private sector's
\noverseas debt, creating an efficient and competitive economy by
\nabolishing monopolies and promoting good and clean governance by
\nfighting corruption, collusion and nepotism, he added.<\/p>\n
"The financial sector must first be revived, otherwise the
\nreal sector cannot grow, as there will be no fresh money
\ncirculating," Aburizal said when asked to comment on Habibie's
\nfirst priority in economic reform.<\/p>\n
He, however, said the government must take concrete measures
\nto regain investor confidence in the economy, including by
\nguaranteeing safety in the business sector and eradicating
\nvarious illegal fees and excessive bureaucracy.<\/p>\n
Many Chinese-Indonesian businesspeople have left the country
\nwith their capital since the May 14 political unrest, in which
\nthere was widespread looting of properties belonging to the
\nethnic group.<\/p>\n
Security troops were seen patrolling the capital last week
\namid rumors that unrest would reoccur on Independence Day
\nyesterday.<\/p>\n
If the rupiah fails to regain ground and remains at its
\ncurrent level of Rp 13,000 to the U.S. dollar, almost half of the
\npopulation could slide into poverty and inflation could reach
\ntriple digits. The rupiah traded at 2,400 to the dollar in
\nprecrisis days.<\/p>\n
Thomas Darmawan, chairman of the Indonesian Food and Beverages
\nAssociation, said that providing security for businesspeople was
\nessential to regain confidence.<\/p>\n
"If the country was completely safe, confidence in the
\ndomestic business sector would return and prompt foreign
\ninvestment to reenter the country," he said.<\/p>\n
Political rhetoric<\/p>\n
Economist Rizal Ramli, however, lambasted Habibie's speech as
\nmere political rhetoric to win popular support for his
\nadministration.<\/p>\n
"Habibie said that he's against corruption, collusion and
\nnepotism, but he presented the country's highest honor to Mrs.
\nHabibie and his brother. This is clearly a nepotistic practice,"
\nhe said.<\/p>\n
Habibie conferred the Bintang Republik Indonesia medal on his
\nwife Hasri Ainun Besari, six ministers and one former minister on
\nFriday.<\/p>\n
Rizal also found Habibie's anticorruption stance questionable
\nbecause of his failure to bring corrupt officials during the
\nSoeharto regime to court.<\/p>\n
"Habibie's economic stabilization measures aren't clear," he
\nsaid, pointing out that his fiscal policy was contradictory to
\nhis monetary policy.<\/p>\n
"In a stabilization program, synchronizing the fiscal and
\nmonetary policies is the most important thing," he said.<\/p>\n
Habibie said the high interest rate regime would have to be
\nmaintained to curb inflation, but huge subsidies were needed to
\nhelp the poor in surviving the year-long economic crisis.<\/p>\n
A group of 15 economist recently criticized the huge subsidies
\nwhich have caused a large deficit in the 1998\/1999 fiscal budget
\nof up to 8.5 percent of gross domestic product.<\/p>\n
They said it was a mere populist policy which would lead to an
\nuncontrollable inflation rate.<\/p>\n
Minister of Cooperatives and Small Enterprises Adi Sasono said
\non the weekend that the huge subsidies were needed because
\ncitizens were getting hungry.<\/p>\n
Habibie welcomed criticism of his policies, but said: "It
\nwould be better if the contribution of ideas was communicated in
\na manner of full of wisdom, lest it should cause confusion or
\neven dissension in the community." (rei)<\/p>",
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