Lessons to be learned from Japan's reform measures<\/p>\n
By Paridah A. Samad<\/p>\n
JAKARTA (JP): Indonesia's reform measures are genuinely needed
\nto restore confidence in its troubled economy during the current
\nmonetary crisis, the worst in the 30 years of the country's
\nperiod of economic growth.<\/p>\n
The US$23 billion aid package provided by the International
\nMonetary Fund and its allies -- the World Bank and the Asian
\nDevelopment Bank -- to Indonesia is to help the country implement
\nits reform measures to face the economic and monetary crisis.<\/p>\n
In exchange for the package, Indonesia has undertaken its
\nfirst measure by revoking several state monopolies and shutting
\ndown 16 financially troubled private banks.<\/p>\n
In justifying the benefits of such measures and in hailing the
\ninternational rescue package for Indonesia, many analysts demand
\nradical bureaucratic reform to ensure proper use of the funds.<\/p>\n
However, no specific ways to implement such reform was
\nmentioned. In spite of this, they believe that the main agenda
\nfor reform should focus on fighting widespread monopolistic and
\ncorrupt practices, bridging the widening socio-economic gap and
\nreducing nepotism.<\/p>\n
For them, although the foreign aid package would support the
\ntroubled national economy, there is a need for the aid to be
\nbacked by a political will to establish a clean government by
\nputting an end to officials' extravagant lifestyles.<\/p>\n
The credibility of the government would be questioned if
\ngovernment officials appear to be living in luxury in spite of
\nthe economic crisis, or seen to continuously spend the much
\nconstrained state budget for ceremonial purposes.<\/p>\n
If this continuing phenomenon prevails, social unrest seems
\nunavoidable in the near future. Social unrest would trigger
\nunemployment and insecurity among employees. The closure of the
\n16 banks with some 250 branches across the country has made
\nthousands of people unemployed. The number of jobless will also
\nincrease with the return of over 20,000 "problematic" Indonesian
\nworkers from Saudi Arabia.<\/p>\n
Recently there were proposals to the government by 50 private
\ncompanies throughout the country to dismiss 10,000 of their
\nworkers.<\/p>\n
In these circumstances, resorting to a security approach to
\nsolve social problems would not help and could even worsen the
\nsituation. If the nonconventional security approach of
\nbureaucratic reform could offer hope for restoring a healthy
\neconomy, it justifies the need for the Indonesian government to
\noverhaul its bureaucratic system which is a prerequisite to the
\nsuccess of its economic reform.<\/p>\n
The problem is that neither analysts nor politicians have come
\nup with a comprehensive strategy for dealing with such reforms.
\nWith the absence of a model for reform, perhaps Indonesia could
\nuse Japan's administrative reform as a guideline in formulating a
\ncleaner government in order to create healthy economic growth.<\/p>\n
The agenda for Japan's administrative reform has focussed on
\nthe bureaucracy.<\/p>\n
Japan's reform has been regarded as important after the
\nemergence of a towering budget deficit surpassing 400 trillion
\nyen (US$3.17 trillion) -- which is tantamount to a declaration
\nthat the authority of the bureaucracy in Japan could no longer be
\nsustained. For the Japanese, this situation represents that it is
\nworse off than any other developed country.<\/p>\n
The Japanese are increasingly aware that in terms of cost and
\nperformance, the current administrative system poses a direct
\nthreat to the future of the country. The bureaucrats are becoming
\nthe butt of vitriolic criticism over their corrupt practices.<\/p>\n
Japanese indignation over a succession of corruption cases
\ninvolving highly-placed government officials has created a great
\ndesire for reform. This has put the administrative reform
\n(Gyokaku) at the top of Prime Minister Ryutaro Hashimoto's
\npolitical agenda and it is now becoming the national catchphrase.
\nThe administrative reform has been construed as being symbolic of
\nthe realization of the need for reform of the country's entire
\nsystem.<\/p>\n
To make Japan's administrative reform really work, the
\ngovernment has to subject all administrative outlays and public
\ninvestments to rigorous cost-and-benefit analyses and make it
\nobligatory for each government agency to publicly report the
\nresult. Any government agency that spends public money owes it to
\nthe nation to prove that the money spent would generate matching
\nsocial benefits.<\/p>\n
The goal of the reform program is to create a simple and
\nefficient public administration that is able to respond to the
\nnew age while being trusted by the nation's citizens. This is
\nimportant in order to prevent Japan's current administrative
\nsystem from posing a threat to the future of the country as a
\nresult of the significance of its rampant corrupt practices.<\/p>\n
The problem in Japan is that the country does not have a
\nstrong leadership. Without strong leadership, the reform process
\ncould easily founder in the sea of committees, and, in the best
\nof Japanese political traditions, a series of compromises that
\nproduce almost nothing.<\/p>\n
Indonesia, however, has strong leadership under President
\nSoeharto, who would provide the backing force to the success of
\nthe bureaucratic reform. Even though a complete overhaul of the
\nbureaucratic system has been identified as the main thrust to
\nsolve Indonesia's current economic predicament, unfortunately,
\nvery few concrete policies are forthcoming on just how this
\nreform should proceed.<\/p>\n
The economic behavior of Indonesia and Japan are quite
\ndifferent, but the desire for both countries to undergo
\nbureaucratic reform is similar, with similar reasons.<\/p>\n
The writer is a senior lecturer at the MARA Institute of
\nTechnology (ITM) in Shah Alam, Malaysia, and previously a
\nvisiting research fellow at the Japan Institute of International
\nAffairs (JIIA), Tokyo.<\/p>",
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