Economic reforms lack direction: CSIS<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
The roots of Indonesia's slow economic recovery lie in the
\nabsence of a clear sense of direction, which has bred ineffective
\nreform policies as the country has sought to escape the economic
\ndoldrums over the past four years, according to the Centre for
\nStrategic and International Studies (CSIS).<\/p>\n
CSIS blamed the lack of direction on the absence of a public
\nconsensus on the government-led reform policies.<\/p>\n
\"An important first step is to have greater public debate to
\ndefine the long-run objectives of economic policy,\" CSIS said in
\na summary of a joint research project conducted with New York's
\nColumbia University.<\/p>\n
The research discussed Indonesian economic institution-
\nbuilding in a global economy. CSIS presented the results during
\nseminars held in Jakarta and Surabaya last week.<\/p>\n
Among its regional peers, Indonesia was the worst hit when the
\neconomic crisis struck Southeast Asia in 1997.<\/p>\n
The crisis has opened the floodgates for both economic and
\npolitical reform, a process Indonesia is still struggling with
\nfour years on.<\/p>\n
\"Slow progress on reforms and restructuring as well as
\ncontinued weak confidence will mean lower growth rates and a
\nlonger period - anything from eight to 10 years - for Indonesia
\nto reach its potential real level of income,\" CSIS said.<\/p>\n
But it added that Indonesia's economy may have bottomed out,
\nand that major structural changes were underway.<\/p>\n
\"There is now the opportunity to reestablish a consensus on
\neconomic policy objectives,\" the research institution said.<\/p>\n
The direction of Indonesia's reform policies is broadly
\noutlined in the lending agreement between Indonesia and the
\nInternational Monetary Fund (IMF).<\/p>\n
The Fund, focusing more on monetary and fiscal reforms, also
\nacts as a barometer for loan programs of the World Bank and the
\nAsian Development Bank, which handle structural reforms like
\nthose relating to the judicial system or the restructuring of the
\nenergy sector.<\/p>\n
But their dominant role in setting the direction of
\nIndonesia's reform policies has often sparked local criticism.<\/p>\n
For its part, the IMF has urged the government to better
\npublicize the importance of IMF sponsored programs such as
\nprivatization.<\/p>\n
Confining talks on reform policies to foreign lenders may
\nresult in a lack of support or even opposition during their
\nimplementation.<\/p>\n
\"The leadership needs to be able to articulate a clear vision
\nof what constitutes a desirable Indonesian economic system, and
\nthis vision needs to have public support,\" CSIS said.<\/p>\n
Failure to do so, it said, produced reform policies that did
\nnot meet, or only partially met, the stated goals while creating
\ndistortions and costs elsewhere.<\/p>\n
Lack of public support also breeds recurring tensions between
\nvarious economic players. They range from issues such as state
\nagainst private, local against foreign, and small against big
\nbusiness.<\/p>\n
\"The only way a consensus can be reached on these issues is to
\nbegin a broad ranging, informed and continuing debate at the
\nnational and regional levels,\" CSIS said.<\/p>\n
But it added that even after a consensus was reached, a no
\nless important task would be to implement the reform steps.<\/p>\n
\"It is important to get reforms basically right, not just
\npassed,\" it added.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/economic-reforms-lack-direction-csis-1447893297",
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