Superfluous advice<\/p>\n
Even though chief economic minister Kwik Kian Gie welcomed
\nPresident Abdurrahman Wahid's decision to appoint another team of
\neconomic advisors, in addition to the two teams already
\ninstalled, no one is fooled by the real message of the move. It
\nsignals Abdurrahman's disappointment with the performance of the
\nKwik-led team that is populated mainly by ministers: of finance,
\ntrade and industry, investment and state enterprises, forestry
\nand plantation, agriculture, mines and energy and transportation
\nand communications.<\/p>\n
The new team will be headed by Widjojo Nitisastro, the
\narchitect of Indonesian economic development from 1967 to 1983.
\nHe continued as advisor to Soeharto until early 1998 when the
\neconomic bubble burst into a multi-dimensional crisis that still
\nengulfs the nation.<\/p>\n
We have observed instances when miscommunication and poor
\ncoordination between Kwik's team of economic ministers resulted
\nin inconsistencies in several major policy measures. The economy,
\ndespite its nascent recovery since late last year, remains in the
\ndoldrums with most domestic and foreign investors preferring to
\nwait on the sidelines.<\/p>\n
But simply blaming Kwik and other economic ministers, who are
\nless than five months on the job, for all the economic woes that
\nhave been dogging the country is not fair. It should be expected
\nthat Kwik, with no experience as a Cabinet minister, let alone as
\nthe economic coordinating minister, would need a learning
\nprocess, especially when one considers the different political
\nparties and organizations represented on his team.<\/p>\n
Moreover, some of the hurdles and bureaucratic inertia often
\nconfronting Kwik were brought about partly by President
\nAbdurrahman, himself, by accommodating all major political
\nparties in his Cabinet. Appointing politicians to the Cabinet
\nwould not have posed major problems had the bureaucracy been as
\nsolid and professional as those in more developed countries such
\nas the U.S., Japan or South Korea. But the bureaucracy inherited
\nby the present government was designed, built and honed by former
\npresident Soeharto to serve his autocratic administration and it
\nis still mounting formidable opposition to Abdurrahman's reform
\nprograms.<\/p>\n
This being said, we don't think the problem lies in a dearth
\nof advisors. Abdurrahman's list of economic advisors already
\nincludes such well known personalities as former prime minister
\nof Singapore, Lee Kuan Yew, and former U.S. Fed chief Paul
\nVolcker. Senior economist Emil Salim, a member of Widjojo's
\neconomic team under Soeharto, leads the President's National
\nEconomic Council of advisors. On top of this, the National
\nBusiness Development Council, headed by businessman Sofjan
\nWanandi, advises the President on practical business issues.<\/p>\n
One wonders what Widjojo Nitisastro has up his sleeve to speed
\nup the economic recovery while the major hurdles hindering such a
\nrecovery are crystal clear: the inimical condition of the
\npolitical apparatus, the security organizations and the legal
\nsystem; the slow pace of decentralization; and too much outside
\ninterference in the debt, corporate and bank restructuring. These
\ndifficulties did not confront Widjojo under the Soeharto
\nadministration.<\/p>\n
Whatever the advice Widjojo may prescribe, nothing will
\nimprove the economy unless the tens of thousands of bad corporate
\ndebts currently under the Indonesian Bank Restructuring Agency
\n(IBRA) are satisfactorily restructured or sold to new investors.
\nForeign investor confidence will never be regained unless the
\nUS$63 billion in corporate debts to foreign creditors are
\nrescheduled. The real sector will remain debilitated for lack of
\nlifeblood as long as IBRA and the central bank are still
\nembroiled in technicalities over the recapitalization and
\nrestructuring of state and private banks.<\/p>\n
Resource-based industries such as mining, fisheries and
\nplantations, supposedly, the most promising areas for new
\ninvestment, will remain shunned by investors as long as local
\nadministrations are dissatisfied with the progress of
\ndecentralization.<\/p>\n
We should also remember that when it comes to economic policy,
\nIndonesia, as 'a patient' of the International Monetary Fund
\nuntil the end of 2002, must implement the crisis management
\nprograms as stipulated in the January, 2000 Letter of Intent from
\nthe government to the IMF. In fact, the agreement, also approved
\nby the House of Representatives, is perhaps the only coherent
\neconomic policy document available right now. It is so detailed
\nwith policy measures and their implementation schedules, that
\nKwik's team now works like a cockpit crew flying a jumbo jet with
\nan automatic pilot.<\/p>\n
So instead of overshadowing and irritating his economic
\nministers with so large a number of outside advisors, President
\nAbdurrahman should further empower Kwik's team to focus on
\nspeeding up the debt, corporate and bank restructuring and enable
\nhis entire Cabinet to zero in on development of good governance,
\nincluding reform of the judiciary and the decentralization of the
\nadministration, as stipulated in the agreement with the IMF.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/superfluous-advice-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}