Nov. 22, 2004<\/p>\n
Waiting for economic action<\/p>\n
It is now already a month after the inauguration of President
\nSusilo Bambang Yudhoyono's United Indonesia Cabinet and the
\nmarket is still waiting for what has long been promoted as
\nSusilo's first 100-day action plan to fully restore investor
\nconfidence.<\/p>\n
In Susilo's speech on Wednesday evening to mark his first 30
\ndays in office it was expected he would reveal the detail of this
\nagenda. His prepared address to the nation instead was mainly
\naimed at warning the people against having too high expectations,
\narguing it would be impossible to solve all the country's
\nproblems in 100 days and that final judgments on the success of
\nhis administration would best be made at the end of his term in
\n2009.<\/p>\n
No one has been so insensible as to expect Susilo's
\nadministration to resolve all the nation's problems in three
\nmonths. But we at least want to see a set of concrete measures
\nplanned regarding the President's promised \"shock treatments\" in
\ntop priority areas of his program.<\/p>\n
In his first week in power Susilo did make the right remarks
\nand the right, if symbolic, moves. He conducted working visits to
\nthe Attorney General's Office and the National Police
\nHeadquarters, conveying a strong message about his determination
\nto fight corruption as his top priority.<\/p>\n
Susilo then made working visits to the tax and customs
\ndirectorate generals, which are not only among the most corrupt
\npublic institutions, as perceived by the public, but also among
\nthe most important targets of reform if his Cabinet is to improve
\nthe country's investment climate.<\/p>\n
In a move demonstrating his awareness of the vital importance
\nof good coordination between monetary and fiscal management, the
\nPresident also met early on with the board of governors of the
\ncentral bank. The series of introductory meetings he made in the
\nfirst week of his administration included, also for a strategic
\nand symbolic reason, the leaders of the House of Representatives
\nand the business world.<\/p>\n
However, such symbolic moves, though needed, are not enough
\nto maintain the momentum of market confidence and the credibility
\nof his administration.<\/p>\n
The announcement of the so-called 100-day agenda is not an end
\nin itself but it is nevertheless important to allow the market
\nand investors to make further judgments on policy direction and
\nto assess how the measures will be implemented. For only
\nconsistent and effective implementation will make the
\ngovernment's policies credible.<\/p>\n
Businesspeople won't expect instant results in all areas. What
\nthey really want to see is steady progress along the right path;
\na consistent reform process and not a one-off event. Everything
\ndoes not have to be fixed at once.<\/p>\n
For sure, Susilo does have his stumbling blocks. Vital
\ninstruments such as amendments to the 2005 state budget, which
\nrequire approval from the House of Representatives are unlikely
\nto proceed quickly, given the adversarial relationship between
\nthe government and the majority factions in the House.<\/p>\n
However, there are many changes to law enforcement and to the
\neconomy that do not need House approval or an additional budget.<\/p>\n
The government can do a lot to change the taxation and customs
\ndirectorate generals, the two public institutions most-maligned
\nby business, without having to wait for the House to enact the
\nthree new bills on taxation, which are still being finalized at
\nthe State Secretariat.<\/p>\n
Moving firmly and consistently to make tax audits more
\ntransparent and accountable, expediting the procedures for tax
\nrefunds and cutting the number of procedural steps to get
\nmerchandise cleared at air and seaports would go a long way to
\ncutting the costs of doing business here.<\/p>\n
This in turn would reduce business risks and transaction costs
\nand strengthen the nation's competitiveness. This virtuous circle
\nwould continue -- bank lending would increase and new investment
\nwould get a boost.<\/p>\n
Likewise, cutting the red tape in business licensing and other
\nrules regulating the movement of goods between provinces or
\nislands would be a strong boost to new investment. Just look at
\nhow a recent survey by the International Finance Corporation, the
\nWorld Bank private-sector arm, ranks Indonesia among the worst
\nplaces to do business because of so many regulatory burdens,
\npolicy risks and a high incidence of bureaucratic corruption.<\/p>\n
It takes about 160 days to get a business started in Indonesia
\ndue to numerous bureaucratic procedures and regulatory
\nrequirements and sadly, most of these procedures do not help or
\nprotect anyone at all.<\/p>\n
The government doesn't need an additional budget to remove all
\nthese constraints, nor does it require House approval. What is
\nneeded is the political determination to consistently enforce
\npolicy measures until they are strongly institutionalized in the
\nsystem.<\/p>\n
It is therefore most imperative that the 100-day action agenda
\nshould include only concrete measures that are bureaucratically,
\neconomically and politically feasible and, most importantly, can
\nbe enforced consistently.<\/p>\n
----------------<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/nov-22-2004-1447899208", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }