Cabinet focuses on meeting basic needs

JAKARTA (JP): President Soeharto asked ministers yesterday to donate their first year's salaries to the poor, declare their personal wealth and that of their spouses and pay serious attention to the public's demand for clean and credible governance.

Soeharto conceded at the first plenary session of his 36- member cabinet that he had yet to find the best solution for the current economic crisis, calling on the nation to brace itself for the possibility of more pain.

"But the President has instructed the continuation of government subsidies for imported basic staples and medicines," Coordinating Minister for Economic, Financial and Industrial Affairs Ginandjar Kartasasmita said after the cabinet meeting.

Ginandjar said the essential commodities would be sold on the open market at an exchange rate of Rp 5,000 to the American dollar -- against the market rate of Rp 10,000 -- to help alleviate some of the pain.

Minister/State Secretary Saadilah Mursjid said the President asked ministers to follow his example by donating their first year's salaries to poverty-alleviation programs.

"Mr. President has decided to donate his entire presidential salary and allowances to the poor, saying he can live comfortably on his soldier's (five-star general) pension," Saadilah said.

Ginandjar, Saadilah and Information Minister Alwi Dahlan briefed the media yesterday on the outcome of the 90-minute cabinet session.

According to a 1993 decree of the finance ministry's Directorate General for Budgetary Affairs, the monthly salaries of the President and Vice President are Rp 15 million ($1,500) and Rp 10 million, respectively.

Cabinet ministers, the speaker of the House of Representatives and chairman of the Supreme Court and Supreme Audit Agency each get a basic monthly salary of Rp 2.5 million ($250).

Minister of Social Services Siti Hardijanti Rukmana has been assigned to manage the funds derived from the President's and ministers' salaries, Alwi said.

"I will manage the funds in a transparent manner," Hardijanti said at a news conference late yesterday.

Ginandjar said the President also ordered the ministers to hone their spending priorities in order to make the most efficient and productive use of the severely limited state budget.

"In facing this most difficult economic condition, which is similar to the dire situation in the early phase of the New Order government, we certainly need to rearrange our spending priorities." he said.

At the meeting, the President conceded that he had yet to find the best solution to the current crisis, notably stabilizing the rupiah rate, Ginandjar said.

IMF

Soeharto said the government would continue negotiating with the International Monetary Fund to resolve any differences of opinion in implementing the 50-point economic reform he agreed to on Jan. 15 as a condition of the US$43 billion bailout program arranged by the IMF.

"However, we will go ahead with our reform program with or without IMF assistance," Ginandjar added.

"Soeharto underlined that we must depend on our own capability. In this difficult time the most important thing is a solution (to the crisis) and to stabilize the rupiah rate."

Ginandjar indicated that the government had yet to decide on a mechanism to stabilize the rupiah rate at a reasonable level.

"Even though a fixed rate regime under a currency board system (CBS) is one of the mechanisms being mulled over, the government has not yet taken a firm decision on this.

"But I regret that the heated debates on the CBS have caused some misunderstandings with the IMF which are now trying to be mended.

"We require a large sum of foreign reserves to back up a credible CBS," he said in reference to one of the barriers to immediately adopting the mechanism.

Elaborating on the social safety net for the poor, Ginandjar said the government would give top priority to securing adequate supplies of rice, soybeans, cooking oil, sugar and wheat flour at reasonable prices.

The State Logistics Agency (Bulog) has been forced to import more than three million tons of rice this year because the country's production declined substantially due to the impact of El Nino.

Minister of Information Alwi Dahlan said the President instructed the ministers and provincial governors to declare their personal wealth and that of their respective spouses, whether in fixed or liquid assets, to him as part of the drive to create a clean government to resurrect public confidence in the government.

"In case a minister is faced with a corruption charge during his or her tenure, the personal asset declaration can then be used as a reference for investigations," Alwi quoted the President as saying.

However the personal asset reports would not be made public, he said.

The upper echelon of officials -- such as secretary-general and director general at ministries -- are required to declare their personal wealth to Coordinating Minister for Development Supervision Hartarto.

Five of the 36 ministers have large business interests, including Minister of Tourism, Arts and Culture Abdul Latief, who is the founder of the ALatief Corporation and Sarinah Jaya department store, and State Minister of Empowerment of State Enterprises Tanri Abeng, who is the president of Bakrie Group.

Minister of Industry and Trade Mohamad "Bob" Hasan owns large stakes in timber and engineering companies, paper and pulp mills, shipping and a wide diversity of other businesses.

Minister of Social Services Siti Hardijanti Rukmana (Soeharto's eldest daughter) controls the widely diversified Citra Lamtoro Group, while State Minister of Sports and Youth Affairs is a major shareholder in the AN-Teve broadcasting service and PT Media Target Prestasi. (prb)