RI problem political in nature<\/p>\n
By Dian M. Noer<\/p>\n
JAKARTA (JP): The world we live in is not perfect. Within this
\ncontext we must aspire to a society that is not a perfect utopia,
\nbut one that is realistic and attainable: a society where each
\nmember, regardless of race, ethnic origin and gender can lead a
\nrewarding life.<\/p>\n
All must have political representation and education. No one
\ncan be deprived of these things, but does this realistic
\naspiration reflect contemporary Indonesian society, even prior to
\nthe current crisis?<\/p>\n
For over 25 years, microeconomic aspects of development have
\ngiven way to big conglomerates. Whole sectors in the economy are
\ncontrolled by powerful companies. These massive conglomerates
\ndominate upstream and downstream industries and fund their
\nactivities through their own banks.<\/p>\n
Although the government provided an environment which allowed
\nthe private sector to grow and aid the development process, the
\nallocative efficiency typical of the private sector and pricing
\npolicy reflecting the true costs of production have not resulted.
\nIn fact, the opposite has occurred.<\/p>\n
An imperfect market structure allows these corporate elites to
\ndetermine the overall market performance. Prices do not reflect
\nthe cost of production because there is no interplay of market
\nforces.<\/p>\n
What is evident in Indonesia is a dualistic economic system,
\nin which elements of liberal capitalism are combined with the
\nweak market forces more characteristic of a socialist economy.<\/p>\n
Furthermore, although the private sector has in theory been
\ndrawn into assisting in the development effort, one question that
\nremains unanswered is just which companies have in fact been
\ngiven the privilege to participate?<\/p>\n
Unfortunately, a collusive intimacy between business and
\npolitics has resulted in very restricted access to a rewarding
\nlife in the present day economy of Indonesia.<\/p>\n
The crux of our economic problem lies not in the monetary
\nsector but in the real sector. The monetary sector has only faced
\ndifficulties for the last six months, but combined with our
\nfragile real sector, this has triggered a downward descent into
\ncrisis.<\/p>\n
Neither the International Monetary Fund (IMF) nor the World
\nBank can be blamed for the crisis. IMF and World Bank involvement
\nin domestic economic policy making activities should not be
\nresented. Nor should the widely publicized photograph of
\nPresident Soeharto signing his agreement to the IMF terms under
\nthe watchful eye of IMF managing director Michel Camdessus.<\/p>\n
The controversy surrounding the signing ceremony is not
\nconcerned with sovereignty but with respect. It is difficult for
\na foreign institution to view a nation riddled with corruption
\nand unequal economic opportunities with respect.<\/p>\n
To some extent, the fault lies with the New Order economic
\narchitects of the early 1970s who, with open arms, readily
\naccepted advice on development offered by these foreign
\ninstitutions. The influential role of the United States in these
\nmultilateral institutions cannot be ignored.<\/p>\n
The government's readiness to embrace these institutions since
\nthe beginning of the New Order makes wrong to now question the
\nconcept of liberalization, unless in a ploy to deliberately
\ndeflect attention from the very essence of the issue.<\/p>\n
If we had held true to the ideals of opportunity for all held
\nby our nations founding fathers then we would not facing the
\ndifficulties that we currently are.<\/p>\n
Technocrats and ministers have succumbed to the advances of
\npowerful and wealthy members of the country's elite and this has
\nresulted in market imperfections.<\/p>\n
Some ministers, even in the last cabinet, were at times guilty
\nof assisting the business interests of the corporate elite in
\nreturn for a piece of the action for their family and close
\nfriends.<\/p>\n
It is therefore by design, not by accident, that we have
\nreached the present situation, where the economy is controlled by
\nthose who have close connections to the political elite. These
\npeople: the very affluent, the owners of big business groups and
\nthose who think they have God given power and wealth, have
\nexclusive control over money, voice and even political activism.<\/p>\n
The result is that their goals become accepted as the public's
\ngoals, their views on economic development are given serious
\nattention by the authorities, out of fear more than sound
\nargument, and more importantly, their views are given a very high
\nprofile in the media.<\/p>\n
To succeed in pressing for the reforms concerned intellectuals
\nand former government officials have said are necessary, the call
\ncannot be confined to one part of the population.<\/p>\n
Ideally, a better society is one in which opinion is voiced
\nand influence exerted by impartial and evenly dispersed
\ngroupings. In reality this may not be workable because it would
\nbe very easy for certain groups to believe the government favored
\ntheir rivals and vice versa, but favoritism based on critical
\njudgment, not collusion and nepotism, can still legitimately
\nexist.<\/p>\n
As we live in an imperfect world, a partially happy society is
\na more desirable option than a society filled with unhappy people
\nliving in a riot-prone environment.<\/p>\n
This is a fundamental issue which requires a political
\nsolution. Although the crisis in Indonesia is economic in nature,
\nthe cure will not be found through economic policy alone.<\/p>\n
For example, it is highly unlikely that a currency board, or
\neven the IMF-plus package which has been bandied around, could
\nguarantee a better Indonesian society in the long run.<\/p>\n
Economic performance is a function of political management.
\nGood governance is therefore a sine qua non for the economy to
\nfunction effectively and fairly.<\/p>\n
The topic of good economic practice requires a separate
\ndiscussion, but good governance requires leaders who are well-
\neducated, honest, impartial, who have integrity and who believe
\nin democratic principles.<\/p>\n
On the other hand, good governance does not hinge on an
\nindividuals ability to gain an advanced degree in aerospace
\nengineering, nor on possessing a military background. One of the
\nmost important principles of democratic society is that civil
\nauthority must not acquiesce to military power.<\/p>\n
However, education is important. A leader who is well educated
\nhas a better chance of leading a nation through more good times
\nthan bad.<\/p>\n
A leader should also have the integrity and the courage to
\nstate clearly what is right and what is wrong, and to make
\ndecisions based on sound arguments and ethical considerations.<\/p>\n
In this country, those who have authority or influence will
\nspeak out only when they no longer hold important government
\nposts, if they speak out at all.<\/p>\n
Prof. Emil Salim's, who was my professor at the University of
\nIndonesia and a figure whom I respect, has voiced comments on the
\ncurrent economic problems and has criticized the government for
\nnot taking immediate corrective action. However he, and other
\nBerkeley-educated technocrats, could have done much more to
\ncorrect the deeply rooted economic problems during their terms as
\nministers.<\/p>\n
It is my firm belief that the only solution to the crisis in a
\nsociety such as ours is to reach out for a better society through
\na political solution. Economic policy interventions have already
\nbeen tried, but to no avail.<\/p>\n
The problem is neither monetary or economic, it is a problem
\nof trust, political trust.<\/p>\n
The solution must therefore be political in its nature. A
\ncomprehensive political solution for the benefit of all the
\npeople and the economy of this country has not yet been
\nattempted. After a generation of the New Order government, it is
\nnow the right time for a fundamental and peaceful change.<\/p>\n
Under good governance sound economic practice will quickly
\nfollow. In turn, this will create an environment conducive to
\ncomprehensive human resource development, which will help to
\ncement a better society.<\/p>\n
Political change is imperative. We must forget the proverb
\nwhich says that if there is a fish that stinks, the stinks come
\nfrom the head.<\/p>\n
The writer is an observer of political economy and lives in
\nJakarta<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-problem-political-in-nature-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}