Economic recovery must be 'top priority'

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)