What political economy?<\/p>\n
Meuthia Ganie-Rochman, Jakarta<\/p>\n
The fall of the Soeharto regime also saw economists lose their
\ntraditional tools to analyze the economy.<\/p>\n
Under the centralized New Order system these were the causal
\nrelations between the creation of economic policy and interest
\ngroups. The newly appointed Coordinating Minister for the
\nEconomy, Boediono, once said economic policy-makers needed to be
\nisolated from day-to-day politics (BIES, Dec. 2005). Now we have
\na much more confusing reality, which requires a new approach to
\neconomic analysis.<\/p>\n
The New Order system was in retrospect not difficult to
\nanalyze. There was a traceable pattern of economic policy -- the
\nSoeharto government oriented it to growth-led economic
\ndevelopment. Then there were the few groups of political and
\neconomic elites that established relatively stable networks
\naround the government. This kind of economic orientation was
\nbacked up by centralized government and its strong economic
\ncontrol made it easier to see the connection between \"interests\"
\nand policy.<\/p>\n
The present situation is more complex, with the traditional
\nareas of interest changing as regional autonomy gives mayors,
\nregents and governments greater power.<\/p>\n
With many more leaders competing for a greater share of the
\neconomic pie, and with different patrons to satisfy, much of the
\ndecisions made are for short-term and selfish reasons.<\/p>\n
Regional autonomy has divided the national economy into more
\nconfusing layers. As the central government has lessened its
\ncontrol over many natural-resource rich regions, its power to
\nallocate and direct resources has also been curtailed.<\/p>\n
Regions and provinces have become arenas for political and
\neconomic competition by politicians often inexperienced with the
\nlevers of power.<\/p>\n
It is true that there is still a great portion of regional
\nbudget funds handed out by central government. However, the
\nlion's share -- as much as 80 percent in many regions -- are
\nallocated only for maintaining the existing structures of the
\nbureaucracy. These regional governments need to develop local
\nsources of revenues for other development activities if they want
\nto benefit their communities and get voted back in the next
\nelection.<\/p>\n
One common feature of a country in transition is the growth of
\na black economy -- the money funneled away by widespread
\ncorruption, the massive destruction of politically sanctioned
\nillegal logging are both examples of non-taxed economies.<\/p>\n
This sorry situation means the actual detail -- or dearth --
\nof policy must become a focus of the national administration.
\nMinisters must put forward intelligent, workable policies to
\nencourage politicians below them to do the same.<\/p>\n
President Susilo Bambang Yuhoyono's majority in the House
\nshould make the focus on policy easier. But he has to bring his
\nsupporters into the fold, otherwise ministers will again start
\nusing the ministries to raise party funds. One clean party could
\nalso begat another if the opposition realizes its political
\nfuture depends on good governance.<\/p>\n
Bureaucratic reform is vital to this process. Countries that
\nhave been successful in improving their economic performance
\n--Singapore, Korea, and China -- all started by reforming their
\nbureaucracy.<\/p>\n
Experienced economists, meanwhile, are necessary to guide the
\ncountry down the road to development -- but leaders need to be
\nmore than just technically competent, they also must be tough,
\nsmart political operators, and good managers.<\/p>\n
Analyses also needs to be made to determine the power and
\ninfluence of central versus local government in particular
\nsectors. The main power the central government can still exercise
\nover regional administrations is through the allocation of
\nregional grants and through the enforcement of national laws.<\/p>\n
Most of the regional governments' budgets, however, are sucked
\nup by their bureaucracy and otherwise misdirected to support
\nleaders' political agendas. There is some hope, however. In some
\ncases, responsible local administrations are actually working
\nwith the state government to improve governance and increase
\neducation and health infrastructure.<\/p>\n
The blank spot here is the black economy. The continued oil
\nsmuggling by Pertamina officials in cahoots with regional
\nofficials, and the billion-dollar-a-year illegal logging industry
\nthat could not go on without the involvement of local leaders has
\nshown how lawless and out-of-control the regions are.<\/p>\n
If this country is to meaningfully reform, these mini-fiefdoms
\nand their supporting bureaucracies must be held to account now.<\/p>\n
The writer is a lecturer and researcher at the Department of
\nSociology University of Indonesia.<\/p>",
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