Economists call for more concrete efforts to restore confidence<\/p>\n
JAKARTA (JP): The loss of people's confidence in the
\ngovernment which has worsened the monetary crisis has to be
\nrestored by revamping the current government, economists said
\nyesterday.<\/p>\n
Senior economist and former cabinet minister Mohamad Sadli
\nsaid the monetary crisis, which has rapidly deteriorated in the
\npast few days, showed that the market had lost confidence in the
\nexisting government.<\/p>\n
"The local and foreign markets have cast a vote of no-
\nconfidence in Indonesia," he said, adding that the rupiah dipping
\nto 10,000 against the U.S. dollar yesterday was an indication.<\/p>\n
He said the rupiah's sharp fall after President Soeharto's
\nspeech on the 1998\/1999 draft budget Tuesday evening indicated
\nthat the fall was not only caused by economic reasons, but also
\npolitical sentiment.<\/p>\n
"The (existing) government must be replaced," Sadli said on
\nthe sidelines of a seminar on crude palm oil organized by the
\nYayasan Indonesia Forum.<\/p>\n
He was referring to the president and his ministers.<\/p>\n
But Sadli noted that under the country's constitution, the
\npresident can only be replaced at a People's Consultative
\nAssembly meeting, while the replacement of ministers could take
\nplace at any time.<\/p>\n
The assembly will convene in March to elect the president and
\nvice president.<\/p>\n
Sadli said political reforms were not enough to solve the
\nmonetary crisis but it could serve as a starting point for an
\neconomic recovery in the long-term.<\/p>\n
"Thailand and South Korea had made political reforms but they
\nwere still in a crisis," he said.<\/p>\n
"Aside from political reforms, the end of the crisis in the
\nregion depends on the perception of foreign investors in the
\nregion," he added.<\/p>\n
Economists Rino Agung Effendi, Rizal Ramli and Subarto Zaini
\nshared the view that financial and economic reforms would not
\nbear any fruit if people's confidence in the government was not
\nrestored.<\/p>\n
"A complete economic reform package will not have any impact
\nnow if the government does not have any credibility at all," said
\nRino, chief economist at Danareksa Sekuritas.<\/p>\n
"The government should regain public confidence first before
\nit launches economic and political reforms," he said.<\/p>\n
Rizal Ramli, a director at the Econit advisory group, agreed
\nand said the government had to restore its credibility because
\nthe policy makers were no longer credible.<\/p>\n
"Our economy has been stagnant over the past four months. It
\nis irrational. People are just waiting for March (when the
\nPeople's Consultative Assembly convenes to choose a president and
\nvice president)," Rizal said.<\/p>\n
The perfect moment was the draft-state budget announced
\nTuesday.<\/p>\n
But the government did not take the opportunity. The 32
\npercent increase in the proposed budget was unrealistic. There
\nwas no mention of any sacrifice to be made by the government from
\nthe lowest to the top level.<\/p>\n
Subarto Zaini, executive director of the Center for Corporate
\nLeadership, said no single government could stand "to ride the
\ntide when the tide comes".<\/p>\n
"And the tide has come. There are no longer any choices
\navailable on how to mend the situation now," he
\nsaid. (jsk\/das\/rid)<\/p>",
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"sponsor": "Okusi Associates",
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