Economic recovery must be 'top priority'

JAKARTA (JP): Senior economists have urged the country's political leaders to reach a consensus in putting economic recovery top of the list of national priorities despite ongoing political rivalries.

M. Sadli and Anwar Nasution said on Wednesday that the consensus was critical if the country is to take advantage of recent positive economic developments and move toward a recovery from the 17-month old crisis.

"The positive signs are still weak and have to be maintained due to uncertainties in the world economy and the limitation of foreign donors willing to continue helping Indonesia," he told reporters when relaying results of a seminar on Indonesia's economic recovery held recently in Australia.

Anwar, dean of the Economics School at the University of Indonesia, added that the national consensus was needed as the country has now more than 100 political parties which means that the upcoming general election would no longer result in a clearly dominant and winning party. This would cause more difficulties in decision making.

"There will be a lot of parties in the parliament which means any decision making process will be much more difficult," he said.

Indonesia is expected to hold a general election in June 1999 and a presidential election the following November.

Many foreign investors are anxious over the possibility that the winning party might abandon the country's agreement with the IMF to implement sound economic reform programs.

Sadli, former minister of manpower and of mines and energy under Soeharto's administration, stressed that achievement of a national consensus was important in order to support the costly bank restructuring program, a key factor for economic recovery, but had been strongly opposed by several political leaders due to the huge budgetary support required.

Sadli also noted that any recovery program had to be based on sound economic policies which could minimize market distortions.

"The economic policies must be market friendly... And implementing sound economic policies can't wait for a political recovery," he said.

He explained that implementing sound and prudent economic principles was an international consensus which the country must adopt to continue gaining the international financial support which would still play a dominant role over the next two years.

Sadli and Anwar were among ten Indonesian economists and two leading business figures participating in the conference in Australia, jointly organized by the Economics School of the University of Indonesia and the Australian National University.

Six of the participating Indonesian economists met on Monday evening with six senior economics ministers on the invitation of the Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita to discuss the conference results.

Also included in the meeting was the Minister of Cooperatives and Small Enterprises Adi Sasono, who has become a controversial figure with his program to strengthen the people's economy.

Adi's proposal of asset redistribution has raised speculation that it would be done through forcing of a massive transfer of assets from the troubled conglomerates to small businesses and cooperatives. This has prompted critics to say that he was merely using a Robin Hood-type ploy to win political support.

Sadli said that Ginandjar convinced the meeting that his economics team would try not to violate the principles of market economy in designing any policy.

"I also saw the other ministers tried to convince Adi Sasono not to go off track," he said.

"And from Adi's side, there was a conviction that he will not be against the market economy or the Chinese," he added. (rei)