Corruption-free government key to recovery: Economist

Corruption-free government key to recovery: Economist

JAKARTA (JP): A new and clean government resulting from the
general election in June, the first since long-reigning president
Soeharto stepped down last May, is the key to Indonesia's
economic recovery, an economist has said.

Sri Mulyani told a dialog forum of the National Front grouping
of retired Armed Forces generals that without a clean government,
it would be nearly impossible to restore the economy, as local
and international confidence has been severely eroded.

"We don't have the luxury of being given a completely clean
government within a few months, but we need a relatively credible
one at the very least," she said, adding the current government
had lost its credibility.

The economic woes, which caused the rupiah to spiral downward
since mid-1997, have been worsened by structural problems in
business and financial sectors as well the monetary system, which
lacks prudent management, she said.

But it was the government's lack of credibility that continued
to undermine Indonesia, while other countries in the region also
battered by the crisis showed more resilience, she said.

Although the government had set out on economic reforms
overseen by the International Monetary Fund, it had been unable
to "reactivate" the economy because its reputation was damaged.

Sri said the solution was to fix the structurally flawed
government by electing a clean and qualified president with the
right priorities, she said.

To be credible, the president must have a clean reputation, be
open and honest with the public, and should cultivate a system of
checks and balances on those in power.

The president's aides must be the most reputable people, she
said.

She claimed that some members in the cabinet of President B.J.
Habibie, who replaced Soeharto when he resigned in May, still had
dubious reputations that hampered efforts to restore the economy.

"If Habibie had appointed the right people, perhaps the
problems would be solved by now," she said.

Under Soeharto's autocratic administration, economic growth
remained high up until the start of the monetary crisis, but
perceived power abuses and shady business deals among his circle
of friends caused wide disparities in the distribution of wealth.

Sri also expressed concerns that the ruling Golkar party,
Soeharto's political vehicle that enabled him to stay in power
for 32 years, would abuse its power to gain public support by
using its vast wealth and populist policies

Habibie, a senior member of Golkar, has been tipped to be the
party's presidential candidate. Some key members of his cabinet
are major Golkar functionaries, including party chairman Akbar
Tandjung, who is minister/state secretary.

Political observers have expressed concerns that the
government would market policies in favor of the public in the
run-up to the elections, or simply buy votes for Golkar.

Sri cited reports of the chairman of the supreme advisory,
A.A. Baramuli, handing out money to the audience during a Golkar
campaign.

"It seems that these people now don't even have to have a good
reputation because they have money," she said.

She agreed that if some of the government's economic policies
were seen to succeed, this would boost Golkar's foundering
credibility.

Its "people-oriented" economy, a campaign promoted by Minister
of Cooperatives and Small Enterprises Adi Sasono, was one of the
populist policies formulated to win public favor.

"Adi's concept of empowering indigenous small and medium
enterprises may be a form of affirmative action to promote
equality, but I'm worried that this would discourage
competitiveness in the business sector," she said, adding this
policy would make opportunities for new cronies. (das)