Mon, 08 Nov 1999

Economists stress independence of DEN

The government's plan to form the National Economic Council (DEN) has gained mixed reactions, particularly regarding its membership. Economist Tony A. Prasetyantono of the Gadjah Mada University in Yogyakarta, who is among candidates mentioned for council members, talked to The Jakarta Post about the issue.

Question: How did you react when you were invited to join the DEN? Is it true you refused?

Answer: Pak Biyakto (former minister of cooperatives Subiyakto Tjakrawerdaya) contacted me on Oct. 21, 1999, to meet President Abdurrahman Wahid the following day. Unfortunately ... it was impossible for me to meet the President, even if I took the first flight the following morning. Pak Biyakto contacted me twice and there was no continuing discussion afterward.

My first reaction about the council's formation was negative as I thought it would overlap with the ministers' expert staff. Yet, once the Cabinet was formed, I began to think it would be very important. Our (economic) ministers all have a microeconomic background. They need people with a macroeconomic background ...

I hope the council will be complementary to ministers. I also think DEN will be more powerful than the ministers' expert staff as it will not be subordinate to ministers. The council would have a high and strategic position. Although its position would not equal the ministers, psychologically the members would be more powerful than the ministers' expert staff.

The council, in my view, would be like the U.S. National Economic Council which is directly under the president's responsibility. Concern has grown over the possibility that the council may create rivalry with the executives, but I don't think so. The council should be clearly separated from the executives. They should not deal with money. They should not manage money at all. Their only concern should be policy. Their analysis, therefore, should be purely academic and objective. That's why only independent people should be involved in the council (for the sake of) the state's interest.

Q: What if there is a difference between DEN and the economic and industrial ministers?

A: It would not matter. It would even be good for the sake of truth and objectivity. I'm not suspicious toward the economic team (economic and industrial ministers) but there is always a possibility that the economic team would be biased to their own political parties. They are partisans anyway.

Such a conflict is even good to evaluate the government's policies. Through discussion and discourse, the council will prevent the policies from any bias. Without such an evaluation, I'm afraid any policy the government makes would just be passed. The council, therefore, will have the function of control. I agree with Pak Kwik (Kian Gie, coordinating minister of economy and industry) that DEN will provide second opinions.

Q: Is it wise to form the council during the crisis?

A: ...To avoid burdening the state budget, the council should be slim.

I agree with (presidential economic advisor) pak Yusuf Faishal that the council should comprise only about 10 people.

Q: Why do you think certain people refuse to join the council?

A: ...there is always concern that DEN's (recruitment) would not be professional. As a result it could be just a stamping agency or it could be co-opted by the government to the effect that it would not be able to say no to the executives ... The inclusion of old regime figures with doubtful track records could be a problem.

Q: Are you talking about Subiyakto and former director general of tax Fuad Bawazier?

A: That's right. Their presence in the council will create a psychological burden to other members of the council. They will make others feel less independent. In fact, independence is the most important factor the council should have. Therefore, it would be better if the council comprise only real new people.

I respect (former government advisors) pak Widjojo (Nitisastro) and pak Ali Wardana for their refusal to join the council, although they referred to age as their excuse. They're very wise; they have the capacity to join the council. It (declining membership) was indeed a very good step. What might be the problem is probably the fact that it was Subiyakto who initially came up with the idea of DEN so it would be difficult to exclude him. Let's just hope that they (Subiyakto and Fuad) will follow the steps of pak Widjojo and pak Ali.

Q: Some believe that DEN was formed to accommodate previous people in the government who are considered of merit to the new government. Your comment?

A: It makes sense although it's difficult to prove so. The problem is, we have made too much compromise so far. Compromise, ideally, should be done only at the highest levels, say at the People's Consultative Assembly, the House of Representatives, the president and the vice president. Compromises should end there.

Therefore, the Cabinet should have been formed based on professionalism. We are in the middle of a crisis. The Cabinet, however, was not optimally formed. This is what I call having no sense of crisis. It's done, anyway, so let's just hope that such a "disease" would not interfere in the formation of DEN.

Q: Is it true that there is an agreement between the Gadjah Mada University's economists and those of University of Indonesia (UI) to refuse to join DEN?

A: Although Sri Mulyani has denied it previously, I'd rather say that it's true that we refuse to sit on DEN. We're afraid of being unable to do anything once we're in it. Fortunately, we at Gadjah Mada and UI happen to have an informal forum which we're thinking of developing. After all our names have been mentioned as candidates for DEN. It's better for us to develop the forum rather than being forced to (accept) pak Fuad and pak Biyakto... The political backing they have will make us feel awkward... After all, we can do something outside the council. With their being in DEN, how can the council be independent? We couldn't expect independence from partisans, could we? (swa)