Analysts stress need for reforms to bureaucracy

JAKARTA (JP): Political analysts hailed the international rescue package for Indonesia but demanded radical bureaucratic reforms to ensure proper use of the funds.

Amien Rais of Yogyakarta-based Gadjah Mada University suggested during a seminar here Saturday that Indonesia pay attention to the former Soviet Union's reform program, perestroika, launched after it received a massive financial aid package worth nearly US$40 billion.

"The government must declare an all-out battle against widespread monopolistic practices, a widening socioeconomic gap and nepotism.

"A halfhearted reform as shown by the government so far will lead the country nowhere," Amien told a seminar held by the Institute of Religious and Philosophical Studies.

The International Monetary Fund (IMF) announced Friday in Washington a whopping $23 billion in aid, adding to bilateral assistance commitments by Asian countries, Australia, Canada and the United States, which totaled $16 billion.

In exchange for the aid package, Indonesia vowed to revoke several state monopolies and shut down 16 financially troubled private banks.

Political analyst Krissantono said the foreign aid would support national economic survival, but he warned that it needed to be backed by a political will to establish a clean government and put an end to extravagant lifestyles.

"The government will lose credibility if people still see officials living in luxury in spite of the economic crisis, or wasting the state budget for ceremonial purposes."

He said social unrest seemed unavoidable in the near future due to the government's economic reforms, part of the IMF's conditions for the rescue program.

"Social unrest triggered by unemployment and insecurity among employees look to be imminent threats," the former Golkar legislator said.

The closure of 16 banks and some 250 branches across the country will leave thousands of people unemployed. The number of jobless will also increase with the return of thousands of problematic Indonesian workers from Saudi Arabia.

But he called on the government not to resort to a security approach to solve social problems merely because Indonesia was bracing itself for the general session of the People's Consultative Assembly in March next year.

"Instead, the government should let the public know exactly what its reform policies are as soon as possible."

He suggested the Assembly members learn from the currency turmoil and draw up State Policy Guidelines which anticipate a crisis in the future.

"They should, for example, reconsider whether or not certain high cost technology remains feasible in the period of recovery," he said.

A newly installed University of Indonesia professor, Maswadi Rauf, said the IMF offer proved the fund's determination to help Indonesia settle its financial crisis.

"The IMF must have decided that the prolonged crisis was not Indonesia's mistake. It was a misfortune," he told The Jakarta Post Saturday.

He dismissed suggestions that political motives lay behind the IMF's lending, saying the world financial body made the decision based on its confidence of Indonesia's capability to repay the loan.

"The IMF must have been confident that Indonesia is politically stable enough to ride out the crisis and that its economy will recover," he said.

Maswadi joined the chorus demanding for the eradication of chronic corruption and colluding practices if the government was to thoroughly heal the ailing economy.

"People can no longer tolerate leakages in our economy," he said. (imn/amd)