Crisis center to provide access to policy-makers

Fitri Wulandari, The Jakarta Post, Jakarta

Indonesia's desperation to escape the prolonged crisis has resulted in yet another decision that many view not only as belated but also questionable as to its effectiveness.

The decision to set up a crisis center early this month, though welcomed as a government gesture to accelerate economic recovery, has triggered more questions than it has brought optimism.

For one thing, there are already a number of agencies, bodies and task forces set up after the country's economy hit rock bottom four years ago. So far, none of the institutions has produced satisfactory results. The center, too, which aims to resolve problems faced by the business community, to boost economic growth, is feared to fail due to various constraints. For one thing, it lacks the administrative power necessary to make it effective to solve problems faced by businesspeople.

Executive director of the center Anton J. Supit admitted on Tuesday that to ensure effectiveness, the center should have been led by an institution that had greater authority, such as the president or the Office of the Coordinating Minister for the Economy, to directly execute decisions.

However, although the center is led by the Ministry of Industry and Trade, which has limited authority, Anton believed it was expected to provide the business community with direct access to the nation's decision makers.

"At the very least, Ibu Rini (Minister of Industry and Trade Rini Soewandi) can present problems faced by the business community to Cabinet meetings," Anton, who is also chairman of the National Economic Recovery Committee (KPEN), said.

While also admitting the lack of political support from higher institutions, Anton said that as a minister, Rini could lobby her colleagues to resolve business problems.

"Ibu Rini enjoys good relations with other ministers. That should be effective enough to coordinate related ministries," said Anton, who is also chairman of the Indonesian Footwear Association (Aprisindo).

The center's main focus will be to solve problems in the manufacturing sector and trade, the major contributors to Indonesia's economy. Indonesia's economy needs to grow at a respectable rate of 6 percent per year so as to be able to absorb huge numbers of unemployed. In order to arrive at the growth rate, exports and investments must be pushed, as the cash- strapped government can no longer be relied upon to revive the country's economy.

But local and foreign investors have been facing various problems in the country.

Labor conflicts, smuggling and security problems are some of the issues that have contributed to the continuing decline of foreign direct investment and exports.

In this regard, the center is expected to serve as a forum for government officials and businesspeople to discuss and resolve problems encountered in the manufacturing sector and trade.

However, analysts doubt that the center will be effective as many problems faced by manufactures and traders are beyond the authority of the Ministry of Industry and Trade.

They argue that it should be led by President Megawati Soekarnoputri, or at least placed under the Office of the Coordinating Minister for the Economy for better coordination and cooperation from other related ministries.

A higher authority is needed to make fast decisions and take concrete action, as well as to reduce red tape, as the center is expected to act like a troubleshooter.

At present, the Center is gathering reports from the business community and listing them, based on their urgency with which they should be discussed at a panel meeting led by Rini and her staff.

For eyebox

Govt fond of setting up task forces

Since the economic crisis hit the country in 1997, the government has set up several task forces in its attempt to help accelerate economic recovery.

The National Economic Council (DEN) and the National Business Development Council (DPUN) were the first two set up by the government in December 1999, during the previous administration of Abdurrahman Wahid.

DEN consisted of 18 senior economists led by noted economist Emil Salim, with the main task of advising the president on macroeconomic policy. The members included economist Sri Mulyani Indrawati and agriculture expert H.S Dillon.

DPUN's members were businesspeople led by Sofjan Wanandi. It was tasked to advise the president on how to revive business activity and create jobs to absorb huge unemployment.

The two bodies only lasted a year. In 2000, the president abolished DEN and DPUN. The Indonesian Chamber of Commerce and Industry then formed the National Economic Recovery Committee (KPEN) on Sep. 5, 2000. KPEN's 32 members were several Indonesian business magnates, such as Kadin boss Aburizal Bakrie, James Riady, Subronto Laras, and also Sofjan Wanandi.

KPEN is intended to continue DPUN's main program, which is to push for job creation to reduce unemployment and support small- scale businesses.

Having established different task forces, the country's main economic problems remain untouched. Even job opportunities have not materialized.