Save our sinking ship<\/p>\n
While senior government officials go to great lengths to
\npublicly portray a much rosier outlook of the economy than what
\nis perceived by the general public, privately they do not
\nhesitate in pouring out their great concerns, fully sharing the
\nviews of most private sector analysts that our economy is indeed
\nvery much like a sinking ship.<\/p>\n
It is acceptable for the government to present a public face
\naimed at preventing expectations of an economic doomsday because,
\nas in politics, the market forces rely very much on public
\nperceptions. What is frightening, though, is that the government,
\nwhich is supposed to be much better informed of the real
\nsituation, still refuses to translate its great concern into
\naction, deluding itself with the belief that the country will
\neventually muddle through the crisis.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti has acknowledged worsening economic conditions as a result
\nof the far-reaching impact on the global economy of the Sept. 11
\nterrorist attacks on the United States. However, more than one
\nweek after his announcement that the government would design Plan
\nB -- a new package of emergency measures -- he is still
\ncollecting working papers from national and international
\ninstitutions. And while the ship is sinking deeper all of these
\npapers will still have to be discussed in what he described as a
\nnational brainstorming conference to determine the best emergency
\npackage.<\/p>\n
Does the government really believe that it can still come up
\nwith quick fix measures? We have great doubts that there are
\nalternative policy instruments other than those already
\nidentified in the August reform agreement with the International
\nMonetary Fund.<\/p>\n
The economic woes now being faced by the nation are still very
\nsimilar to those that surfaced after the 1997 crisis. The only
\ndifference is that the magnitude of the problems is now much
\ngreater because the global economy that helped bolster Indonesian
\nexports is in trouble. It would be a miracle if 2000 export
\nlevels could be maintained.<\/p>\n
The other economic engine -- private consumption -- is also
\nsputtering. All surveys have concluded that both consumer and
\nbusiness confidence are now weakening due to the new uncertainty
\ncreated by the continuing wave of anti-American demonstrations.<\/p>\n
The ailing banking sector has not yet resumed its
\nintermediation function and new lending remains insignificant due
\nto the high risks of business. Pump priming from fiscal stimulus?
\nDon't even think about it.<\/p>\n
The government is technically bankrupt, with debts already
\nexceeding 100 percent of gross domestic product (GDP). Likewise,
\ninvestment is out of the question, given the high-risk premium
\nattached to the country in view of the weak law enforcement and
\ncomplications arising through the implementation of regional
\nautonomy.<\/p>\n
The 2001 fiscal deficit is in danger of ballooning far beyond
\nthe 3.7 percent of GDP targeted because, with less than 10 weeks
\nuntil the end of this fiscal year, revenues from asset recovery
\nand debt restructuring programs are still way below the set
\ntargets. Worse still, not a single cent of the Rp 6.5 trillion
\n(US$650 million) expected from the privatization program has been
\ncollected.<\/p>\n
We are extremely worried that without several successful
\nreform measures to improve confidence in the government's
\ncredibility, the social and political environment will not be
\nconducive to more painful measures -- increases in fuel,
\nelectricity and telecommunications prices -- that have to be
\ntaken next year to slow down the economic bleeding.<\/p>\n
What is urgently needed now is not a national brainstorming
\nconference to iron out a new emergency package, but real and fast
\naction by the government to push through the programs concerning
\nasset recovery, debt restructuring and privatization, as well as
\nbroadening the tax base and implementing banking sector reforms.<\/p>\n
Only when the attitude and actions of the leadership filter
\nthrough to the bureaucracy's lowest ranks and fully reflect the
\nurgency of the situation, will the government earn the
\ncredibility and authority required for developing a national
\ndisposition among the public and all political leaders for mutual
\ncooperation in saving our sinking ship.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/save-our-sinking-ship-1447893297",
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"sponsor": "Okusi Associates",
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