Indonesian Political, Business & Finance News

Burhanuddin who?

| Source: JP

Burhanuddin who?

We mean no disrespect to Burhanuddin Abdullah, but his
appointment as the government's new economic czar on Tuesday
prompted more questions about President Abdurrahman Wahid's
intentions or priorities in resolving the country's economic
problems. With little explanation from the President, the country
was simply left guessing once again about the rationale or the
logic behind this latest mini-reshuffle of his Cabinet.

Burhanuddin is a little known deputy governor of the central
bank with a stint at the International Monetary Fund (IMF). That
much we know. Given the current strained relations between the
government and the IMF, we can only speculate that Burhanuddin
was picked to help smooth these relations, and pave the way for
the disbursement of a loan tranche that has been held back for a
few months now. Another way of looking at his appointment is
that, given his central bank experience, he could cement better
relations with Bank Indonesia Governor Syahril Sabirin and ensure
that the country's monetary policies are better coordinated.

Burhanuddin's predecessor Rizal Ramli, who was demoted to
become the new minister of finance in place of Prijadi
Praptosuhardjo, has been taking a more anti-IMF stance in recent
weeks, perhaps in apparent frustration at the delay in the IMF
loan disbursement. Reflecting the President's personal animosity
toward Bank Indonesia Governor Syahril, Rizal also failed to
coordinate his policies with the central bank. The rupiah has
continued to slide in the last six months even as the monetary
authority was hiking interest rates.

On these two counts, Burhanuddin's appointment makes sense.
But the demands of the job of a coordinating minister for the
economy go way beyond just striking the right chords with the IMF
and the central bank. Rizal's biggest failing in fact has not
been in his relations with the IMF or Bank Indonesia. Where he
did fall short most was in his relations with the House of
Representatives. The House has repeatedly blocked many of the
government's economic programs that would have satisfied the IMF
and lead to the disbursement of the tranche.

The House, for example, has prevented the speedy disposal of
some of the corporate assets in the possession of the Indonesian
Bank Restructuring Agency (IBRA). The sales of Bank Central Asia
and Bank Niaga, which would have raised significant funds to help
plug the government's budget deficit, have been put on hold
thanks to the House's stubbornness.

In selecting his new economic czar, the President should have
looked for someone with strong political negotiating skills,
someone capable of pushing the government's economic programs
through the complex legislative procedures. Time will tell
whether or not Burhanuddin fits that bill. In all earnest, he
should be given the chance to prove himself in his new job. We
should all extend our support, if not sympathy, as he begins this
very daunting task.

The little explanation that came with the latest changes in
the Cabinet again illustrates an Abdurrahman administration that
is becoming less and less transparent. For all we know, these
changes were made to consolidate his position, and not, as some
of his aides would have us believe, to appease his critics or to
strike a political compromise with his rivals.

But with the President almost certain to be impeached in less
than two months, anything is possible now, even the irrational,
illogical or simply irrelevant, like some of the recent changes
in the Cabinet.

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