Cabinet takes heat for sluggish economic recovery

Cabinet takes heat for sluggish economic recovery

JAKARTA (JP): The country should not expect to see any major
new foreign investment for at least a year due to security
concerns and political uncertainty over the work of the Cabinet,
a senior economic adviser said.

National Business Development Council chairman Sofyan Wanandi
said on Wednesday that apart from the obvious concerns over
security, there were also questions about the effectiveness of
the government's economic team.

"I cannot see foreign investors entering the country in the
first year (of the new government) due to the bad law enforcement
we have now," Sofyan said.

Speaking on the sidelines of a seminar at the Centre for
Strategic Studies, Sofyan said he was aware of hundreds of
complaints from businesspeople about the lack of a stable and
secure environment.

He also said the impending 15 percent to 55 percent hike of
regional minimum wages was a concern among investors, noting that
there were these wage hikes on one hand while on the other hand
security could not be guaranteed.

"I will have a meeting with the President on Friday to discuss
these problems. And I really hope we can all reach a consensus
between the businesspeople and laborers on the salaries before
April," Sofyan said.

Foreign investors expect an increase in their overhead costs
because the government plans numerous hikes, including of
regional minimum wages and electricity rates, beginning on April
1.

Sofyan hinted that part of the reluctance of foreign investors
stemmed from their wariness of President Abdurrahman Wahid's
economic team, which, despite an impressive lineup, had yet to
present any real concrete solutions to improve the battered
economy.

According to Sofyan, who also heads the Gemala Group, the
recent establishment of economic boards was a result of the
economic team's failure to perform effectively.

"Once the economy is back on track, there is no need for these
boards and they should be disbanded," he said, referring to his
own council formed in December and the Emil Salim-led National
Economic Council formed in November.

However, Sofyan refused to blame the stagnant economic solely
on the government's economic team.

"This is a coalition Cabinet, we have to give it more time to
get to know each other and harmonize their potentials," he
remarked.

In his view, the economic team in the Cabinet, the core of
which comprises Coordinating Minister for the Economy, Finance
and Industry Kwik Kian Gie, Minister of Finance Bambang Sudibyo,
Minister of Industry and Trade Yusuf Kalla and State Minister of
Investment and State Enterprises Development Laksamana Sukardi,
should be given until the end of the year before personnel
changes are considered.

"They just started working, we should give them time, maybe
until the end of this year .... There are many handicaps slowing
the (economic) recovery," he said.

Reshuffle

Sofyan's remarks were in stark contrast to those of other
political observers, who seemed to have lost patience with the
work of the government's economic team.

Economist Pande Radja Silalahi told the Post the President
should contemplate making changes to the team as the country's
economy remained stagnant and there were no signs of new
investment.

He said the economic team lacked clear priorities and goals.
"The government should have set certain goals and priorities for
the economy," Pande said, adding that without defined priorities
no immediate improvements would occur.

He also concurred with the view that once the economy got back
on its feet the members of the economic boards should serve as
mere advisers, without being directly involved in economic
matters.

"They (the boards) should not interfere anymore with the
country's practical economic affairs," Pande said.

Mochtar Pabotinggi of the Indonesian Institute of Sciences
also urged the President to reshuffle his Cabinet, which he said
lacked priorities in repairing the economy.

"Priorities and goals are very important ... Gus Dur has to
set some to enhance the performance of the Cabinet," Mochtar
said, referring to the President by his nickname.

But Mochtar did not say which ministers he believed should be
replaced. "I cannot mention names but I suggest a total reshuffle
of the Cabinet, especially in the two fields (of economy and
law)."

Meanwhile, Sofyan, when asked about his reported feud with
Kwik, said there might be a misunderstanding between them but it
was far from a serious dispute.

"Me and Pak Kwik, as Pak Kwik said last night, have known
each other for a long time. There's only a slight
misunderstanding that has been exploited by outsiders to oppose
my opinions with those of Pak Kwik," Sofyan remarked.

Kwik and Sofyan reportedly are embroiled in a dispute over
policy and the work of their respective institutions. (dja)