A business solution

The dialogs on Monday between the two presidential candidates -- Susilo Bambang Yudhoyono and incumbent president, Megawati Soekarnoputri -- and national and foreign business leaders are greatly encouraging, as regards the future management of our economic problems.

We were impressed by Susilo's eloquence in demonstrating his comprehension of the multi-dimensional crisis that we have been facing since early 1998, and the commonsensical manner in which he presented his policy recommendations.

He showed full understanding of the vital importance of basic infrastructure, legal certainty, the sanctity of contracts, the crucial role of the dispute settlement mechanism, and the role of tax as the main source of state revenue and as an instrument to enhance economic justice.

Susilo seems fully aware of the severe limitations of the government's budget, and consequently of the vital role of the private sector as a primary source of investment, without which, the economy would remain stagnant and no new jobs would be created.

It is precisely because of the similarity of their economic strategies and policies that investors and businesspeople are reassured that, regardless of which candidate is elected, the next government will continue to emphasize the strengthening of macroeconomic stability as a basic foundation to spur sound growth in microeconomic sectors.

In fact, given the severe limitations of the state budget, at least until 2009, since almost one third of its revenue will have to go on serving domestic and foreign debt and subsidies on fuel and other poverty-alleviation programs, the next government has no other alternative but to focus on reinvigorating domestic and foreign investment.

It is investment that creates jobs and provides wages, which in turn generates purchasing power, fuels consumer demand to keep factories in production, and generates tax revenue to fund the government, public services and utilities.

However, investors require the very things our presidential candidates outlined at the business dialogs: Legal certainty, adequate infrastructure and good governance, efficient customs and tax services and conducive labor and business regulations.

The questions then are these: If there is nothing fundamentally wrong with the economic plan of the present government, why is our economy trapped in a low-growth cycle? Why are 10 percent of the nation's 103-million-strong workforce unemployed? What makes foreign investors shun our economy and domestic investors still reluctant.

Here, we think, lies the real importance of the presidential election next month, and what happens thereafter.

What is fatally missing from the present government is a real sense of crisis, and a sense of urgency to make decisions on, and resolutely execute, the right priority programs. Because, as strong as the Megawati government claims macroeconomic stability to be, the economy not only remains highly fragile but also continues to bleed, suffering under mountains of foreign and domestic debt.

What is urgently needed, therefore, is a strong leader with a team of able and credible ministers. Ministers of impeccable integrity, who would work in the spirit of a hospital's emergency unit, whereby fast decisions and concrete programs of action are more important than bureaucratic rigidities.

However, such an overall work spirit is possible only if the new government is able, through good governance practices, to get the public on side and secure the support of the House of Representatives -- unlike the present administration, which has suffered constant public suspicion regarding any major decision, whether planned or implemented. Consider the trouble the current administration has had trying to sell some of its assets -- even already approved by the House -- without setting off an employee's revolt, or prompting analysts to cry fault.

With some modifications and adjustments the spirit and format of Monday's business dialogs with the Indonesian Chamber of Commerce and Industry could be transformed by the new government into an economic-crisis management center, where policy decisions could be decided with speed and coordinated by fiat decisions at the highest level.

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