Cabinet delay frustrates market<\/p>\n
JAKARTA (JP): Further delays in the Cabinet announcement
\nfrustrated the market and tempered optimism of a competent
\neconomic team, as suspicion grew of intensified politicking
\nundermining the team's capability, economists said on Thursday.<\/p>\n
Economist Faisal Basri said the ongoing delay was a strong
\nsignal that political parties, vying for seats in the Cabinet,
\nhad intensified their lobbying.<\/p>\n
\"People have started to wonder how a solid team can emerge
\nunder these circumstances,\" he told reporters.<\/p>\n
After two weeks since her induction, President Megawati
\nSoekarnoputri has yet to announce her Cabinet.<\/p>\n
A Thursday meeting with leaders of political parties, which
\nbacked her presidency, failed to end in agreement over the
\nCabinet lineup.<\/p>\n
President Megawati was expected to announce the Cabinet either
\nFriday or Saturday, but postponed it until next week for reasons
\nthat are, so far, unclear.<\/p>\n
Political analysts have said Megawati wanted to ensure her
\nCabinet would receive broad political support by opening doors
\nfor compromise.<\/p>\n
\"If the principle applied here is to accommodate everyone's
\ninterests, not everyone can be satisfied,\" Faisal warned, adding
\nthis could lead to more infighting within the Cabinet.<\/p>\n
He said that if parties that favor political compromise were
\ngiven positions in the new Cabinet it could muffle critics
\nagainst the new government.<\/p>\n
\"This is political collusion, where everyone shuts their
\nmouths, eyes and ears,\" he explained.<\/p>\n
Faisal added that, even if core members of the economic team
\nwere credible and experienced professionals, it would be
\nmeaningless if other ministerial posts fell victim to political
\ncompromise.<\/p>\n
\"You can cripple a good economic team, if say, the Ministry of
\nIndustry and Trade, the forestry ministry and the agriculture
\nministry fall into the hands of political parties,\" Faisal said.<\/p>\n
Confidence of a competent economic team has kept the rupiah
\nfrom falling amid strong corporate demand for the U.S. dollar.<\/p>\n
But as President Megawati's indecisiveness has lingered, so
\nthe market's optimism has waned. The rupiah closed on Thursday
\ntrading down at 9,640 compared to 9,630 the day before.<\/p>\n
The Jakarta Stock Exchange Composite Index made a hefty loss,
\nending the day down 1.5 percent at 436.41 from 443.19.<\/p>\n
Economist Pande Silalahi questioned how long market optimism
\ncould prevail given President Megawati's slow performance.<\/p>\n
He said that as long as she could bring out a credible
\neconomic team, the market would not mind the long wait.<\/p>\n
Commenting on the Cabinet lineup, he said it was unlikely
\nMegawati would assign ministerial posts to all the best
\neconomists in her party, the Indonesian Democratic Party of
\nStruggle (PDI-P).<\/p>\n
Some of the economists should remain behind the stage to
\nbecome Megawati's economic think tank.<\/p>\n
\"If everyone is out on the front, who is guarding home?\" he
\nsaid.<\/p>\n
According to him, President Megawati will probably retain Kwik
\nKian Gie as her economic advisor to discern input from her
\neconomic team.<\/p>\n
Legislators and politicians also expressed their concerns over
\nthe impact that the Cabinet delay would have on the market.<\/p>\n
Akbar Tandjung, speaker of the House of Representatives,
\nadmitted that he and his Golkar Party did not know the reasons
\nbehind President Megawati's decision to defer forming her
\nCabinet, but said this could receive a negative response from the
\nmarket and raise negative speculation about her new government.<\/p>\n
\"We suggested that the Cabinet lineup be announced this
\nweekend, amid the market's positive response to the new
\ngovernment; but the President has decided to do it next Thursday,
\nfor reasons that are unclear,\" he said, after a meeting of party
\nleaders.<\/p>\n
Akbar said the urgent task for the new government was to
\nstabilize the rupiah's exchange rate to win the confidence of
\ndomestic and foreign markets in Indonesia's economy.<\/p>\n
\"We fully support Megawati's government and we hope the market
\nwill not raise negative sentiments against it,\" he said.
\n(bkm\/rms)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cabinet-delay-frustrates-market-1447893297",
"image": ""
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"sponsor_url": "https:\/\/okusiassociates.com"
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