Economists stress independence of DEN

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)