It is time to get real
\nJP\/6\/JUORO<\/p>\n
It's time to get real<\/p>\n
Umar Juoro
\nJakarta<\/p>\n
The political debate on the fuel price hike has absorbed a lot
\nof attention of late. Not only has the House of Representatives
\nspent a lot of time and energy on deciding whether to
\nsupport or reject the policy, but also many students decided to
\nwaste their precious time, supposedly to be devoted to study, by
\nparticipating in street demonstrations.<\/p>\n
This may be what we call the price of democracy. Anyway, the
\nHouse earlier this week finally agreed to the policy, although it
\nwas not clear as to how the legislators would deal with the fuel
\nprice increases as part of their revision of the 2005 budget. As
\nfor the students, they are likely to continue their street
\ndemonstrations against the higher fuel prices.<\/p>\n
There has been a long tradition of student activists in this
\ncountry opposing government policies the they perceive as adding
\nto the burdens borne by the people.<\/p>\n
From the debate on the fuel price increases and the final
\ncompromise deal reached to defuse the House opposition, one thing
\nis quite clear -- the role of Golkar as the main political party
\nhas been instrumental. Without Golkar support, the policy would
\nhave been rejected by the House. Certainly, the role of Vice
\nPresident Jusuf Kalla, the new Golkar leader, and Golkar's
\npragmatic approach to economic policy, contributed significantly
\nto the compromise.<\/p>\n
From now on, the Susilo administration will be more dependent
\non Golkar support to get its policies past tough scrutiny in the
\nHouse. This is also because the president's Democratic Party is
\ntoo small and inexperienced to influence decision making in the
\nHouse, and the President's other political allies, such as the
\nProsperous Justice Party, are quite reticent about supporting
\npolicies that are considered unpopular.<\/p>\n
Considering this new pattern in the political landscape, as an
\nexperienced political party Golkar would like to have more
\nrepresentatives in the United Indonesia Cabinet as a consequence
\nof its support for the government.<\/p>\n
Accordingly, for some time to come the government's attention
\nwill be preoccupied by political issues rather than the details
\nof economic policy implementation, with the other big parties,
\nespecially the Indonesian Democratic Party of Struggle (PDI-P)
\nand the National Awakening Party (PKB), becoming more hostile to
\ngovernment policies.<\/p>\n
The government will still not to be able to concentrate on
\npolicy details, especially as regards difficult issues such as
\nbureaucratic reform, taxation, labor relations and
\ndecentralization. The bureaucratic reform that the government
\nenvisions, but has not yet implemented seriously, might also be
\ndelayed or rendered ineffective until such time as the
\ngovernment's political coalition and the Cabinet has solidified.<\/p>\n
Many of the new senior bureaucrats who will probably be
\ninstalled soon after many delays might find themselves replaced
\nagain should there be a Cabinet reshuffle in October as VP Kalla
\nhas indicated.<\/p>\n
Even though many political analysts say that politics is all
\nabout image, when politics is related to economic policy it is
\nthe real thing that counts.<\/p>\n
Economic policy can never be successful if it is only based
\non image. It is concrete results that matter in economics.
\nConsidering the new configuration of the political scene. It
\nwould be wiser for the President and his VP to consider seriously
\nsooner rather than later a Cabinet reshuffle, especially so as to
\ngive Golkar the power it feels it deserves.<\/p>\n
By doing this, the other parties, especially the PDI-P and
\nPKB, could play an opposition role in a healthy, democratic way.
\nThe government would also be able to focus on and speed up reform
\nin a more sustainable way -- something that is essential to put
\nthe economy onto a path of high and sustainable growth.<\/p>\n
There is no question that the popularity of the government,
\nespecially the President, and the political parties that
\nsupported the fuel price increases, especially Golkar, have
\ndeclined significantly. This cannot be overcome through
\ncompensatory measures involving direct subsidies for health and
\neducation, no matter how effectively the government channels
\nthese.<\/p>\n
The channeling of targeted subsidy is always easier said than
\ndone even in developed countries with reliable, competent
\nbureaucracies. The only way the government can regain the support
\nof the public is by giving them sustainable jobs through economic
\ngrowth. But to attract investment the government needs to
\novercome the impediments to business, such as the lack of legal
\ncertainty, rampant corruption, taxation problems, labor strife
\nand the difficulties associated with decentralization. Sadly,
\nthough, not much progress has been made in these areas.<\/p>\n
The wrier is the Chairman of CIDES (Center for Information and
\nDevelopment Studies), and a Senior Fellow at the Habibie Center.<\/p>",
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