ECONIT blames economic team for slow recovery
ECONIT blames economic team for slow recovery
JAKARTA (JP): The Advisory Group on the Economy, Industry and
Trade (ECONIT) said on Tuesday the country's sluggish economic
recovery was a result of the poor overall performance of the
economic team in the Cabinet.
The consultancy firm's latest quarterly report said the team's
weakness originated from an absence of operational leadership,
which was pivotal in translating strategies into operational
policies and actions.
"They have failed to formulate a common agenda and common
priority because they do not share visions and perceptions," the
report said.
The Cabinet's economic team has been unable to capitalize on
being part of a legitimate government to speed up the county's
economic recovery and reform, the report added.
"As such, conditions have weakened the bargaining position of
the economic team with the International Monetary Fund and the
World Bank," it said.
The team's compromised bargaining position has allowed these
international institutions to interfere with detailed government
policies, according to the report.
"Matters important to the country's economic recovery were not
given attention because the economic team was too busy
appointing new officials to executive posts at government
institutions and business units," the report added.
This lack of attention further weakened the already poor
coordination among the team's members, ECONIT said in its report.
Delays in the implementation of reform programs outlined in
the government's letter of intent to the IMF could have been
avoided had there been adequate coordination, the report
continued.
Developments over the past several weeks underline the
mounting pressure on the rupiah, despite the country's sound
economic fundamentals and praise of the country by international
institutions and creditor countries.
"It has become a worrying sign. The existing high expectations
for and confidence in the Indonesian government have taken a
downward turn.
"The declining confidence is mainly due to the uncertainty in
law enforcement and the more visible conflicts among the
political elite over power and possession of economic resources,"
the report said.
Meanwhile, private investors have begun to look negatively on
the prospect of economic recovery in Indonesia, as reflected by
sluggish trade on the Jakarta Stock Exchange (JSX), according to
the report.
The JSX Composite Index has continued to decline, approaching
the 500 level from its intrayear high of 703 points in mid-
January.
There was great hope for a smooth economic recovery when the
current Cabinet was formed, but these hopes failed to become
reality as the economic team failed to take concrete steps to
make meaningful improvements in the country's economy.
Trading on the JSX is a main indicator of the trend in the
country's short-term and medium-term investments, the report
said.
"Capital inflow is usually preceded by portfolio investments
in the equity market as well as in the money market.
"The flow of investment funds into the country was needed to
make the current consumer-driven economic growth sustainable," it
said. (udi)
JAKARTA (JP): The Advisory Group on the Economy, Industry and
Trade (ECONIT) said on Tuesday the country's sluggish economic
recovery was a result of the poor overall performance of the
economic team in the Cabinet.
The consultancy firm's latest quarterly report said the team's
weakness originated from an absence of operational leadership,
which was pivotal in translating strategies into operational
policies and actions.
"They have failed to formulate a common agenda and common
priority because they do not share visions and perceptions," the
report said.
The Cabinet's economic team has been unable to capitalize on
being part of a legitimate government to speed up the county's
economic recovery and reform, the report added.
"As such, conditions have weakened the bargaining position of
the economic team with the International Monetary Fund and the
World Bank," it said.
The team's compromised bargaining position has allowed these
international institutions to interfere with detailed government
policies, according to the report.
"Matters important to the country's economic recovery were not
given attention because the economic team was too busy
appointing new officials to executive posts at government
institutions and business units," the report added.
This lack of attention further weakened the already poor
coordination among the team's members, ECONIT said in its report.
Delays in the implementation of reform programs outlined in
the government's letter of intent to the IMF could have been
avoided had there been adequate coordination, the report
continued.
Developments over the past several weeks underline the
mounting pressure on the rupiah, despite the country's sound
economic fundamentals and praise of the country by international
institutions and creditor countries.
"It has become a worrying sign. The existing high expectations
for and confidence in the Indonesian government have taken a
downward turn.
"The declining confidence is mainly due to the uncertainty in
law enforcement and the more visible conflicts among the
political elite over power and possession of economic resources,"
the report said.
Meanwhile, private investors have begun to look negatively on
the prospect of economic recovery in Indonesia, as reflected by
sluggish trade on the Jakarta Stock Exchange (JSX), according to
the report.
The JSX Composite Index has continued to decline, approaching
the 500 level from its intrayear high of 703 points in mid-
January.
There was great hope for a smooth economic recovery when the
current Cabinet was formed, but these hopes failed to become
reality as the economic team failed to take concrete steps to
make meaningful improvements in the country's economy.
Trading on the JSX is a main indicator of the trend in the
country's short-term and medium-term investments, the report
said.
"Capital inflow is usually preceded by portfolio investments
in the equity market as well as in the money market.
"The flow of investment funds into the country was needed to
make the current consumer-driven economic growth sustainable," it
said. (udi)