Doubts cloud potency of economic recovery decree<\/p>\n
Dadan Wijaksana and A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
Economists voiced their doubt that the People's Consultative
\nAssembly (MPR) decree on economic recovery could accelerate a
\nrecovery process because it did not provide more power to the
\ngovernment to execute key economic policies.<\/p>\n
Raden Pardede of the Danareksa Research Institute said on
\nMonday that the government was often locked in endless debates
\nwith legislators when talking about critical economic measures to
\nhelp push for a faster economic recovery.<\/p>\n
\"We cannot expect the government to push for higher growth,
\nwhile at the same time the House often gives the government a
\nhard time whenever it executes policies,\" he told The Jakarta
\nPost.<\/p>\n
The decree on economic recovery, issued by the MPR during its
\nAnnual Session, ending on Sunday, is meant to provide general
\nguidelines for the government to speed up the country's economic
\nrecovery process.<\/p>\n
On many occasions, the government's privatization and asset
\nsale programs have met with delays due to strong rejection from
\nlawmakers.<\/p>\n
As a consequence, the government has only managed to raise
\nsome Rp 2.26 trillion of the Rp 6.5 trillion (US$715 million) of
\nprivatization proceeds targeted for this year.<\/p>\n
Raden said that without the support of the legislature and
\nother state institutions, such as the judicature, it would be
\nimpossible for the government as an executive to speed up the
\nrecovery process.<\/p>\n
He said that the role of the judicature was also crucial,
\nparticularly in boosting legal certainty.<\/p>\n
Serious legal uncertainty has been one of the factors
\ndiscouraging foreign investors from returning to the country.<\/p>\n
The need for a special Assembly decree on economic recovery
\nhas often come up as progress has been slow in lifting the
\ncountry out of its economic slump, which resulted from the late
\n1990s devastating economic crisis.<\/p>\n
The country's economy, which contracted by nearly 14 percent
\nin 1998, is moving at a slow pace and failing to keep up with the
\nneed for sufficient job creation to absorb the millions of people
\nput out of work by the crisis.<\/p>\n
Apparent setbacks in several economic indicators, such as
\nexports and investments, have only added to the pressure for
\nefforts to push the recovery process.<\/p>\n
The National Development Planning Agency (Bappenas) has
\npainted an even bleaker outlook, projecting the country's economy
\nto grow this year by only about 3 percent, which is below the
\nstate budget's target of 4 percent.<\/p>\n
The modest growth would only absorb 1.5 million workers, which
\nis way below the estimate of 2.5 million new jobseekers this
\nyear.<\/p>\n
Meanwhile, economist Pande Radja Silalahi also said that the
\ndecree would not be effective as it merely provided
\nrecommendations and lacked specific measures.<\/p>\n
Pande lashed out at broad statements made by the Assembly in
\nthe decree, saying that the MPR should detail the items.<\/p>\n
\"We know that investments are crucial to propel economic
\ngrowth, however, the Assembly has failed in the decree to
\nstipulate measures on how to increase investments,\" he said.<\/p>\n
The Assembly should show the government how to raise
\ninvestments, such as what the government should do to assure
\ndomestic security and legal certainty.<\/p>\n
The MPR decree on economic recovery stipulates five policy
\nprinciples and 10 policy recommendations.<\/p>",
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