Discord in economic team continues<\/p>\n
Economists stand by exasperatedly as political interests keep
\novershadowing steps to recovery, says economist Arif Arryman. He
\nrecently spoke to The Jakarta Post during a meeting among former
\nfellow student activists in Yoygakarta. An excerpt of the
\ninterview follows:<\/p>\n
Question: What is the significance of this meeting of 1977-
\n1978 activists?<\/p>\n
Answer: It is to reconfirm that the so-called reform movement
\nhas not ended. The idea of reform raised by the 1998 students is
\nan accumulation of disappointments from 1977 to 1978.<\/p>\n
All forces wanting to make a total correction (reform) have to
\njoin forces and have to reach a consensus to prevent narrow
\nparticular interests from becoming dominant.<\/p>\n
The complete correction on the economy, for example, has to be
\nfocused only on the economy.<\/p>\n
We have to quickly manage the economic structure, the
\ninstitutions for allocation of economic resources, and fairer
\neconomic opportunities at local and national level.<\/p>\n
It's now time to provide access and opportunities to the lower
\nmiddle income group ... to implement regional autonomy to give
\nregional governments their necessary authority. These must be our
\npriorities and they must be done now.<\/p>\n
Why? Recovery steps so far ... are stuck. It's because, first,
\nthe economic policies and strategies are not stimulating
\nrecovery. Second, the management of recovery program is unsteady.
\nThere is no coordination. (The officials) are not able to work as
\na team. They don't have leadership.<\/p>\n
Q: Could you elaborate?<\/p>\n
A: Just look at some fundamental macroeconomic indicators, such
\nas interest rates, relatively controlled inflation and the
\ngrowing rate of the quarterly gross domestic product.<\/p>\n
All indicate that our economy is recovering. But such a
\nrecovery is false ... it is based on consumers. Unless it is
\nfollowed by adequate investment or capital flow, such recovery
\nwon't be sustainable and inherent.<\/p>\n
Import growth is much higher than that of export. If nothing
\nis done, this will surely disrupt the balance of payments that
\nwill further affect the rupiah's exchange rate. In the last few
\nmonths, the rupiah's value has been consistently decreasing. The
\nsame thing is happening to the stock exchange.<\/p>\n
This shows increasingly declining confidence among the local
\nand international business markets ... compared to when the
\ngovernment was just being formed. This has to be changed.<\/p>\n
Otherwise, we will be thrown back to the old order. We will
\nlose many chances to make corrections to numerous existing
\ndistortions.<\/p>\n
Q: Is the present economic team still capable of handling the task?<\/p>\n
A: I don't think so. From the beginning, when the Cabinet was
\nformed, I said that this Cabinet was put together through
\npolitical accommodation, in which political interests, and not
\nprofessionalism, would be dominant.<\/p>\n
That explains why the teamwork among Cabinet ministers,
\nespecially those dealing with the economy, lack coordination and
\ncooperation. This is fatal, especially because they are the motor
\nto move and speed up recovery.<\/p>\n
Q: Could the recent replacement of ministers be justified as the
\nPresident's efforts toward recovery?<\/p>\n
A: Partial replacement is not enough. We need a complete change
\nin the management of the economics team, which has to be related
\nto the legal enforcement program. Otherwise, it won't be any
\ngood. As we see it, none of the legal cases of Soeharto and his
\ncronies, for example, have reached the courts.<\/p>\n
To completely understand the problem, therefore, we need a new
\nconsensus among the political elite. Gus Dur's (President
\nAbdurrahman Wahid's) government cannot be separated from their
\nsupport.<\/p>\n
But ... now, political interest is quite dominating,
\nespecially in the assigning of people to particular positions.
\nThis must be stopped immediately.<\/p>\n
We can do so by totally replacing those in the economics team
\nand the legal team with professionals with a good track record.
\nDo you see Abdurrahman as being capable of doing so?<\/p>\n
Replacing Cabinet members is the President's prerogative.<\/p>\n
But when the President does (use this right), the political
\nelite mess about with it.<\/p>\n
Therefore, without a new consensus among the political elite,
\nnothing can be done. (Abdurrahman) will surely face a stiff
\nchallenge this August (at the General Session of the People's
\nConsultative Assembly). There will be many questions regarding
\n(the replacement of Cabinet members).<\/p>\n
That's why I think that now there is a chance for the
\npolitical elite to come together to agree on something and honor
\nthat in relation to the recovery program. A complete correction
\nin politics is needed and it can't be postponed.<\/p>\n
Q: What about the role of the National Economic Council (DEN) and
\nthe other boards?<\/p>\n
A: In a time of crisis like this, what is needed is teamwork. The
\nforming of DEN or other similar boards, in one way or another,
\nonly shows that the management in the Cabinet just doesn't work.<\/p>\n
That's why I suggest a total change. Form a team that has the
\ncapability of team-working, that has synergy with one another.
\nCertainly, some other boards would be needed, but they must have
\nsynergy. Otherwise, they will mean nothing.
\nWould such a new team and a new consensus be able to attract
\nforeign investment?<\/p>\n
Yes ... many are postponing their investment here because they
\nworry about political uncertainty, about the guarantee of their
\nfuture earnings ... This (investment) will never come as long as
\nthe political situation is shaky.<\/p>\n
They (investors) surely think that it would be much better for
\nthem to invest in Thailand, for example, or South Korea, or the
\nPhilippines, where political stability is much more guaranteed
\nand the economic environment is more conducive.<\/p>\n
Yet economic-related problems are a second priority here. As a
\nresult ... there is no identical vision and perception among our
\npolitical elite in how to reform.<\/p>\n
Foreign investment in Indonesia is now relatively small, given
\nthe absence of political certainty, and where there is no
\nguarantee that the correction made is conducive to capital flow.<\/p>\n
Economically, there is no reasonable reason for investors not
\nto invest here. The stagnant investment flow is, therefore, more
\ndue to political risk. Country risk here is very high. There is
\nno certainty in policies as well as in the management of the
\neconomic recovery programs. (Sri Wahyuni)<\/p>",
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