U.S. wants market-oriented policy<\/p>\n
JAKARTA (JP): United States Ambassador to Indonesia Robert
\nGelbard expects the Cabinet's new economic team to adopt a
\nmarket-oriented economic policy to attract investment.<\/p>\n
Gelbard said on Friday investment was crucial for the country
\nto create more jobs and achieve a sustainable economic recovery.<\/p>\n
\"We want to see a market-oriented economic policy and I feel
\nvery confident that Rizal Ramli will lead Indonesia in that
\ndirection,\" he said, referring to the newly appointed
\ncoordinating minister for economic affairs.<\/p>\n
Gelbard was speaking to the media after meeting with Rizal at
\nthe office of the State Logistics Agency (Bulog), which Rizal
\nstill heads.<\/p>\n
\"It is going to be very important for Indonesia to develop a
\nstrong open investment climate,\" he said, before adding, \"Our
\ncompanies are very interested in investing in Indonesia.\"<\/p>\n
Gelbard welcomed the appointment of Rizal and the other
\neconomic ministers, and said the U.S. government would support
\nthe new economic team. \"I think this will be a good economic
\nteam. We'll be supporting them.\"<\/p>\n
\"I've known Rizal Ramli for quite sometime. My colleagues and
\nI have a great deal of respect for him. I think his selection was
\nan excellent choice.\"<\/p>\n
Gelbard also said new Minister of Finance Prijadi
\nPraptosuhardjo would be a fine minister, adding that he had
\nearlier met with Prijadi.<\/p>\n
The International Monetary Fund, the World Bank and the Asian
\nDevelopment Bank earlier expressed their support for the new
\neconomic team.<\/p>\n
President Abdurrahman Wahid announced his new Cabinet on
\nWednesday, and the lineup is expected to be sworn in on Saturday.<\/p>\n
The immediate response of the financial market to the new
\nCabinet was negative, particularly its view of the new economic
\nteam.<\/p>\n
Analysts said the main source of controversy was the
\nappointment of Prijadi, a long-time friend of Abdurrahman who
\nfailed a central bank fit-and-proper test when earlier nominated
\nto head state Bank Rakyat Indonesia.<\/p>\n
The market also is concerned by the fact that all of the key
\nmembers of the new economic team are loyalists of the President,
\nraising speculation this would create a problem between
\nAbdurrahman and Vice President Megawati Soekarnoputri, who chairs
\nthe Indonesian Democratic Party of Struggle (PDI Perjuangan), the
\nlargest party in the legislature.<\/p>\n
Other major political parties also were left out of the new
\nCabinet. Some analysts have said the new economic team will have
\ndifficulty dealing with legislators from the major parties.<\/p>\n
The head of the House of Representatives Commission IX for the
\nbudget and banking, Sukowalujo Mintorahardjo, echoed this view.<\/p>\n
\"I imagine that legislators will take a hard line toward the
\nnew economic team, including those (legislators) from the Axis
\nForce, Golkar Party and PDI Perjuangan,\" he said.<\/p>\n
Sukowalujo said the key to the success of Abdurrahman's
\nadministration lay in the hands of the new economic team.<\/p>\n
\"If they fail, it could trigger a demand for the legislators
\nto hold a special session (of the People's Consultative
\nAssembly),\" he said.<\/p>\n
Legislators can move to impeach the President in a special
\nsession.<\/p>\n
Sukowalujo also said the market had a negative perception of
\nthe new Cabinet, particularly Prijadi, who had been rejected by
\nthe market.<\/p>\n
He said if this perception continued, the Indonesian Bank
\nRestructuring Agency would have difficulty selling the assets
\nunder its control to help finance the state budget.<\/p>\n
Meanwhile, Rizal met with Megawati at her house on Friday to
\ndiscuss steps to be taken to achieve economic recovery.<\/p>\n
The President is expected to issue a decree on Saturday
\nhanding over the day-to-day running of the government to
\nMegawati. The Vice President will be assisted by two coordinating
\nministers -- Rizal and Coordinating Minister for Political,
\nSocial and Security Affairs Susilo B. Yudhoyono.<\/p>\n
\"We discussed the need to increase the number of meetings
\nbetween the coordinating ministers and the Vice President, and
\nalso with the President,\" Rizal said following the two-hour
\nmeeting.<\/p>\n
He also said Megawati agreed to work with the new economic
\nteam to accelerate the country's economic recovery.<\/p>\n
Separately, the director general of financial institutions at
\nthe Ministry of Finance, Darmin Nasution, said Prijadi had a
\ndifficult job because there were several issues that needed to be
\ncompleted immediately.<\/p>\n
\"This is a difficult time,\" Darmin said.<\/p>\n
He said among the pressing issues was the preparation of the
\n2001 state budget, which must be debated by the legislature
\nbeginning next month, and the fiscal decentralization policy to
\nbe implemented in January next year.<\/p>\n
Darmin also said the new finance minister would have to work
\nout plans to swap the performing loans under the Indonesian Bank
\nRestructuring Agency with government recapitalization bonds in
\ncommercial banks in a bid to reduce the burden on the state
\nbudget.<\/p>\n
The government issued bonds to finance the bank
\nrecapitalization program, and the state budget will cover the
\ninterest rate of the bonds. (rei)<\/p>",
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