Strong governance needed to maintain economic growth<\/p>\n
JAKARTA (JP): Asian countries need to maintain their strong
\ngovernments but improve their accountability to maintain their
\nhigh economic growth momentum, an expert said yesterday.<\/p>\n
James R. Rohwer, the author of bestselling book Asia Rising,
\nsaid at a leadership seminar yesterday that Asia's success was
\nmore because of authoritarian government and strong social
\ninstitutions and values than favorable economic values.<\/p>\n
"Asia will accelerate the shock waves that have already begun
\nto destroy the Western world's assumption about public policy and
\nsocial organization," Rohwer said at the seminar organized by law
\nfirm Prasetio Utomo and the Indonesian Capital Market Society.<\/p>\n
But he said the rise of modern Asia had depended
\noverwhelmingly on judgments based on personal trust and
\nconnections.<\/p>\n
He said such lack of institutionalized practices run the gamut
\nfrom opacity of company governance to lack of political
\naccountability to paucity of infrastructure.<\/p>\n
Sofyan Wanandi, chairman of Indonesia's Gemala Group, said
\nsuch informality in doing business had benefited many Asian
\ncompanies in terms of decision making.<\/p>\n
"Not like in the West, where decision making is slow due to
\nlegalistic procedures, our decision making is much faster because
\nof our informality," Sofyan said.<\/p>\n
But Rohwer said Asia needed to move beyond its informal and
\npersonal way of doing business, of governing, and of handling
\nrelations between states and businesses if it wanted to maintain
\nthe momentum.<\/p>\n
The kind of change you need is the kind that will create
\ntransparency in governing and in the way the companies are run,
\nRohwer said.<\/p>\n
Sofyan agreed and said Asian countries needed more democracy
\nin their politics and their economies. They also need a clear
\ntransitions of leadership in government.<\/p>\n
"Unfortunately, we are still in the dark as to who will
\nsucceed President Soeharto. That's why, after the coming general
\nelection, I do hope that the ruling Golkar party would come up
\nwith the names of possible successors," Sofyan said.<\/p>\n
He suggested Indonesia subscribe to the way leaders in China,
\nSingapore or Malaysia grooming their possible successors.<\/p>\n
Rohwer said Asian countries were allured to relax their rigid
\nexchange rate management to reduce their exposure to rate
\nfluctuations.<\/p>\n
Rohwer commended Bank Indonesia's policy of relaxing its
\nexchange rate regime by widening the rate band of rupiah against
\nthe U.S. dollar to 5 percent.<\/p>\n
He also suggested Asian governments privatize some public
\ninfrastructure projects and offer attractive premiums to private
\ninvestors, especially foreign investors, to invest in
\ninfrastructure.<\/p>\n
Most Asian countries still needed large capital to finance
\ntheir infrastructure development, he said.<\/p>\n
Estimates show that at least US$1.5 trillion will be needed to
\ndevelop infrastructure in Asia over the next 10 years.<\/p>\n
In addition, Rohwer warned Asian governments of social and
\ndemographic changes. In Indonesia, for instance, elderly people,
\nconsidered to be not productive, had in the last 25 years grown
\nfrom 7 percent to 14 percent of the population.<\/p>\n
"In France it took 130 years for the elderly to grow 100
\npercent, but in Indonesia, it took only 25 years," he said.<\/p>\n
While most Asian countries are getting richer, Rohwer said
\nthey should not subscribe to social welfare programs adopted by
\nWestern European countries. Such social safety nets could erode
\ntheir economies' competitiveness. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/strong-governance-needed-to-maintain-economic-growth-1447893297",
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