A genie from John Hopkins?

A genie from John Hopkins?

Who is Steve Hanke? Who brought him to Indonesia? The
questions have been asked many times, but so far no satisfactory
answers have been forthcoming.

He in no time emerged in the economic and financial world of
Indonesia, and quickly wielded a dominant role over local
economic and financial experts, standing like dwarfs next to this
professor of applied economics from John Hopkins University. That
is all right, as long as he is in a temporary advisory position
and trying honestly to help Indonesia get out of this very
serious crisis. This also means avoiding trying to dictate what a
sovereign, free Indonesia should and should not do.

We know the professor proposed the currency board system
(CBS), which has no far stirred up controversy and no resolution,
even as the economic situation gets worse.

The pro-camp has its arguments in defending this system, and
the contra-camp has its valid reasons in claiming it is not yet
applicable in Indonesia. In such a situation, only the commander,
militarily speaking, can make a decision. From what I know, a
firm decision, however bad, is always better than letting the
situation go on without a decision and keeping
everybody guessing.

Yet we all know that there is nothing perfect in this world,
and that everything has its good and bad sides. This indecisive
situation is a heaven for speculators, and those creators and
fomenters of harmful issues for the government.

Then we hear about an IMF-plus plan which, according to Hanke,
is also his brainchild. In Suara Pembaruan of March 2, 1998,
Hanke he was on his way to Baltimore to prepare the IMF-plus
plan. Why should Hanke prepare this plan, while we have plenty of
Indonesian economic and financial experts, who also know much
more about the country's politics.

Hanke said the IMF-plus plan was the only possibility to
stabilize the rupiah and revive the economy. He added that he
would be back after the presidential election. Do we have to wait
for him that long before taking action?

But, only a while ago, he said the CBS was the remedy
for Indonesia's economic and financial disease. And he said the
IMF plan was a total failure because the rupiah did not recover
after the President signed the letter of intent. If the IMF plan
is, indeed, a total failure, where does the blame lie? If this
plan is not good, why still use it, with additions, as IMF-plus?

The President stated the IMF-plan was based on liberalism and
hence contradicts Article 33 of the Constitution, and the
President is firm in his vow to implement the Constitution to the
letter (The Jakarta Post, March 9, 1998).

In relation to the CBS, Hanke said the plan would go ahead.
But how can he say that when the government itself appears
undecided about the exact fate of CBS? (The Jakarta Post,
Saturday, March 7, 1998, page 8).

In my opinion, the IMF cannot be accused of dictating to
Indonesia because it is only asking that the country implement
the signed letter of intent. The President repeatedly said the
IMF was good and wants to help. The President knows what he is
doing. He is not a man who is easily dictated to or intimidated.
Perhaps there are other considerations hampering the realization
of the IMF plan.

The Indonesian public has an obligation to support the
government and place trust in its efforts to overcome the crisis.

SOEGIH ARTO

Jakarta