Aburizal's coordination

Chief economics minister Aburizal Bakrie correctly observed last week that it was difficult to reduce the high costs of the economy without better coordination among the various economics ministries and government agencies.

By making these remarks after accompanying President Susilo Bambang Yudhoyono to a meeting with Australian businesspeople in Sydney, Aburizal was essentially acknowledging a failure to do his job as the coordinating minister for the economy.

Coordinating all the economics ministers in a concerted effort to address the high costs that have damaged the competitiveness of our economy should have been at the top of Aburizal's agenda right from the start. He should have developed the Coordinating Team for Facilitating Exports and Imports, which he chairs, into an effective business-solution forum where all problems related to exports and imports could be resolved quickly.

As the country's economic ills have been correctly diagnosed and appropriate policy prescriptions formulated, taking into account the recommendations of the Indonesian Chamber of Commerce and Industry (Kadin) in its Business Road Map, Aburizal should have been able to draw up an appropriate set of priorities and measures to remove one by one the high-cost factors in the economy.

As Aburizal is a former chairman of Kadin and took an active part in preparing the chamber's Business Road Map, he must be familiar with the most pressing problems that have made Indonesian exports much less competitive compared to exports from countries such as Vietnam and China. Aburizal also does not have to worry too much about interministerial jealousy because he has powerful support -- Vice President Jusuf Kalla, also a former Kadin leader, who was appointed by the President to run the day- to-day management of the economy.

A former businessman, Aburizal must be aware of the gross inefficiency at ports that has made the port-handling costs in the country almost twice as high as those in other ASEAN countries. These high costs are the result of arduous clearance procedures, a corrupt customs service and unnecessary intervention in port operations by other state agencies.

What Aburizal needs to do now is demonstrate effective leadership to turn the Coordinating Team for Facilitating Exports and Imports into an operations center where economics ministers, top bureaucrats and leaders of business associations can work together to formulate a plan to fix the country's economic problems. Any barriers to international trade such as inefficient ports, punitively high terminal handling charges, arduous customs clearance should be addressed immediately by the coordinating team.

Aburizal should see to it that the team makes bureaucratic action more important than bureaucratic procedures and rigidities, resolving problems by executive fiat on the spot, all with the clear objective of removing economic barriers one by one.

Facilitating exports and imports would resolve the bulk of our economic ills because international trade accounts for more than 50 percent of the country's economic activities. Moreover, exports and imports are closely related. The process for the production of export goods usually begins with the import of basic materials. The implementation of investment projects starts with the import of capital goods. Further down the line, a smooth flow of goods enhances economic interlinkages between provinces and islands.

A combination of executive leadership from Kalla and coordination provided by Aburizal for all the economics ministers, as well as support from business leaders, should enable the coordination team to create a conducive environment for managing the economy.

Proper policy instruments, however small they may initially seem, will increase the public's confidence in the government's economic management, and this in turn will create an environment for the introduction of other measures.

Local and foreign businesspeople do not expect all of the problems to be resolved overnight, realizing that many measures to improve the business and investment climate require institutional reform and behavioral changes. But the business community does expect the government to move quickly to demonstrate its commitment to steady, concrete steps toward economic reform, however small the steps may be.