Analysts urge establishment of credible cabinet

Analysts urge establishment of credible cabinet

JAKARTA (JP): Economists expect the upcoming cabinet to be a
credible one to help solve the country's ongoing economic crisis.

Both domestic and foreign investors hope the new cabinet will
be able to rebuild confidence in the government and the country's
markets, said Umar Juoro, a senior economist at the Center for
Information and Development Studies.

The private think tank is connected to newly elected Vice
President B.J. Habibie.

"Confidence in the government is currently low," he said.

He explained that Indonesians were hoping the new cabinet
could deal with the problem of providing staple goods at
affordable prices.

The current economic crisis has seen prices of basic
commodities skyrocket, prompting riots and looting in several
areas of the country.

Umar said the international community was looking for the
cabinet to rebuild confidence by implementing economic reform
programs prescribed by the International Monetary Fund (IMF) and
agreed to in a letter of intent by President Soeharto in January.

Umar, however, doubted whether the cabinet would fully
implement the reform programs and meet international
expectations, judging by the names widely rumored to be included
in the ministerial posts.

He pointed out that timber tycoon "Bob" Hasan was tipped to be
the new industry and trade minister.

Bob is a long confidante of President Soeharto and also is the
chairman of the country's controversial Association of Indonesian
Wood Panel Producers (Apkindo), which has been closed down under
the IMF reform program.

"It would be useless if the new cabinet is filled with cronies
like Bob Hasan, Tanri Abeng and Fuad Bawazier," said Hartojo
Wignjowijoto, an economist at the Asia Pacific Economic
Consultancy.

Tanri Abeng is a prominent business executive who, together
with Director General of Tax Fuad Bawazier and a few other power
elites, run the Council for Monetary and Economic Resilience,
established by President Soeharto to deal with the crisis.

Hartojo stressed that reformists should be incorporated into
the cabinet, otherwise confidence in the country would further
deteriorate.

The chairman of the Center for Corporate Leadership, Subarto
Zaini, agreed and suggested that President Soeharto appoint Emil
Salim as minister of finance.

By choosing Emil, who strove for the vice presidential post
but failed, Soeharto could show the international community that
he is determined to reform and democratize this country, he said.

"Why not? He's clean, bright and, most of all, accepted and
trusted by the international community," he said.

Many believe that Habibie, a 61-year-old German-trained
engineer, will have much influence in the formation of the new
cabinet. This has worried investors and the IMF since the former
research and technology minister has a controversial reputation
for supporting big-budget projects and unorthodox economic views.

Former legislator Tadjudin Noer Said suggested that Habibie
would be more moderate in running the country, and would not
continue to support ambiguous, foreign exchange-consuming
projects.

He called on Soeharto and Habibie to select the best people
for the next cabinet according to their expertise so the
positions would be filled with capable leaders.

Umar, however, believed that although Habibie would have more
influence over state affairs than his predecessors, Soeharto's
eldest daughter, Siti Hardiyanti Rukmana, would enjoy a more
influential position in selecting cabinet ministers.

Hardiyanti is a businesswoman and a key executive in the
dominant Golkar political organization. Over the past few days,
she has strongly criticized the IMF, which has postponed its
second US$3 billion tranche of $43 billion in bailout funds to
Indonesia.

Pande Raja Silalahi, an economist with the Centre for
Strategic and International Studies, said such inward-looking,
nationalistic stances could be counterproductive in building
international confidence in Indonesia.

"I have learned that the international community is concerned
over whether the next cabinet will be comprised of some inward-
looking people. Therefore, I hope the President will choose
outward-looking people to sit in the next cabinet," he said.

Hartojo also suggested the cabinet focus on quickly
stabilizing the rupiah, tackling unemployment and boosting the
role of small and medium-sized businesses in the economy.

Unemployment has not only affected the unskilled labor market,
but also well-trained and experienced white collar workers, he
said, adding that solving the problem would boost the country's
stalled production industry. (08/rid)