Economists tell Megawati not to waste public trust

Kornelius Purba, The Jakarta Post, Singapore

President Megawati Soekarnoputri should be able to use the strong political support she received from the public and her opponents to speed up the implementation of her Cabinet's programs in rescuing the country's shrinking economy, Indonesian senior economists and political observers warned on Thursday.

M. Sadli, who served several Cabinet posts under then president Soeharto, pointed out that Megawati's current position was quite safe, at least for the short term, from any significant efforts to destabilize her leadership. He quickly added that it could not last long unless she was able to show convincing progress in reviving the dying economy.

Sadli, a professor of economics at the University of Indonesia, said people were desperately waiting for good news from the economy, because they had been suffering too long and were tired of waiting for empty promises from the previous governments. The terrorist attacks on the U.S. and the U.S.-led military attacks on Afghanistan have further worsened Indonesia's gloomy economic prospects, he noted.

He also said that the International Monetary Fund (IMF), World Bank (WB) and Asian Developing Bank (ADB) were also fed up with Megawati's sluggishness in realizing the government's reform pledges such as carrying out the restructuring of banks, the sale of IBRA assets, the overhaul of the judiciary system and stemming corruption.

"If Megawati's government can make some progress in this area, the situation may improve. Even under present difficulties, there is still hope," said Sadli in his key note speech at a seminar here.

The seminar was jointly organized by the Institute of Southeast Asian Studies (ISEAS) and the Jakarta-based Centre for Strategic and International Studies (CSIS). The topic of the public forum was "The First 100 Days of President Megawati Soekarnoputri: Political and Economic Perspectives". All the 12 speakers were Indonesian, including CSIS's Jusuf Wanandi and political scientist Mochtar Pabottingi. Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti canceled his presence as he had to accompany Megawati to the opening session of the People's Consultative Assembly (MPR).

CSIS executive director Hadi Soesastro noted that both the markets and the public had so far failed to see clear, coherent and firm policies on the part of the government to deal with the country's political and economic crisis.

Hadi said that in the short term, the disposal of assets and the privatization of some state enterprises, which were already in the pipeline, should be executed without further delay. The government needed successful cases quickly before confidence was totally lost. This requires, in the first instance, strong and effective political will and leadership, Hadi said.

According to Hadi, no new measures were required and there was no need to look for radical, alternative measures to restore the economic chaos. There were also no quick fixes. A breakthrough would be obtained only through hard work and determination to accelerate and strengthen the implementation of the government's recovery agenda, Hadi noted.

"If the government fails to undertake essential rescue efforts, namely to accelerate the implementation of the recovery agenda, the country and the economy will fall into an even deeper pit. The end result will be the greater incidence of poverty, increased unemployment and a downward economic spiral into a state of misery," the economist cautioned.

Former governor of Bank Indonesia Soedradjad Djiwandono praised Megawati for her strong determination in dealing with major donors and international agencies, like the IMF. However, the Sept. 11 attack, its aftermath and the slowing down of the global economy, clouded the prospect of economic recovery under the IMF-supported program, he remarked.

"This development has caused the promising start of Megawati's presidency to run out of steam. Uncertainty is returning, the rupiah is weakening and economic recovery seems to have disappeared, at least for the time being," said Soedradjad.

Mochtar Pabottingi predicted that Megawati would be able to finish her term in 2004. He said most of her political rivals, ranging from Vice President Hamzah Haz to Assembly Speaker Amien Rais were still not strong enough to challenge her leadership.

Mochtar, however, criticized Megawati for her weak leadership and poor vision. Megawati was surrounded by people who upheld the status quo, many of them were former New Order politicians and government officials. Her inability to eradicate corruption, collusion and nepotism has been strongly influenced by those people, Mochtar said.

"It is difficult to expect much from her if she continues to adopt her housewife style of management, as she recently disclosed," said Mochtar.

Meanwhile, rector of Jakarta's State Institute of Islamic Studies (IAIN) Azyumardi Azra attracted great attention from the 300 participants of the seminar when he delivered his speech on the challenge of political Islam. He played down the significant power of the several Muslim hard-line groups in Indonesia despite their highly publicized anti-U.S. protests in Jakarta recently.

The tendency to view the hard-liners as representatives of Indonesian Islam was unfortunate. Despite the growing prominence - at least in the mass media - of the hard-liners, mainstream Indonesian Muslims remained moderate in their religious attitudes as well as in their political behavior, said the scholar.

"It is again clear that hardline political Islam has very little prospect in Indonesia. It is also very doubtful that hardline Muslim groups will be able to post a real threat to President Megawati's government," said Azyumardi.

Azyumardi reminded the audience that mainstream Islam was represented by the major Muslim organizations, Nahdlatul Ulama (NU) and Muhammadiyah, estimated to have up to 40 million members each.

"The two largest Muslim organizations in Indonesia have publicly stated that they do not agree with, let alone support, the appeal to Indonesian Muslims to wage a jihad in Afghanistan," Azyumardi said.

He, however, warned that prolonged U.S. military operations in Afghanistan would destabilize countries with large Muslim populations like Indonesia, Malaysia and Pakistan.

Meanwhile, Jusuf Wanandi emphasized the importance of implementing civilian supremacy over the Indonesian Military (TNI), not only in laying out the law and regulations on defense and domestic security but also in the realization of the rules, regulations and the accountability of the TNI to civilian authority.

"This has yet to happen. What has been proclaimed thus far is that civilian control is limited to the decision-making level and so does not include the implementation. In the end, a political culture ensuring complete civilian supremacy has to be established gradually," said Jusuf in his speech on the changes in TNI's political role.