Effect of crisis 'to be felt until after March 1998'
Effect of crisis 'to be felt until after March 1998'
YOGYAKARTA (JP): The state of the Indonesian economy will
remain precarious and the pain of the ongoing monetary crisis
will still be felt after the people's representatives have
elected a new president in March, a scholar says.
Economist Revrisond Baswir of Gadjah Mada University said in a
monthly discussion held here yesterday by the Center of the Study
of Strategies and Policies that no firm prediction could be made
about the country's economy until after the conclusion of the
People's Consultative Assembly (MPR) meeting.
"It could stabilize, it could get worse," Baswir said, adding
that people could only cope by taking short-term measures in
order to ease the pinch.
Investors, fund managers and businesspeople are putting most
of their activities on hold until the general assembly announces
whether there is to be a new leader in March.
He also said that a slow-down in the economy was the likeliest
scenario for next year and that the 1998 state budget, which the
government is to unveil next week, will be more constrictive.
"The (reportedly planned) increase of about 9 percent in the
budget, if it is true, will mean nothing with the two-digit
inflation of the year," he said.
The rupiah's drastic depreciation against the U.S. dollar and
the off-shore dollar loans which are due to mature soon, he said,
would place the government in an even more difficult situation.
"The only choice would be for the government to economize," he
said. He added the government would certainly withdraw its
subsidy for fuel, leading to price rises.
Another speaker at yesterday's discussion, Amien Rais,
highlighted what he called a decline in the government's
legitimacy.
He cited social unrest, strong protests against some
government policies and violent brawls involving unemployed
youths, as signs that the government was losing both its
political and moral legitimacy.
"The monetary crisis... (shows) we're experiencing a crisis
of public trust," he said. "The big question is: will the
government be able to restore this public trust?"
Amien Rais, who is chairman of the 28 million-strong
Muhammadiyah Moslem organization, said the nation had two
options. The first was to maintain the status quo, which would
lead to a further decline in the public's trust of the
authorities. The second choice was to change the national
leadership in order to usher in fresh hopes for society.
"In other words, the choice is either a succession or a
disaster," said Amien Rais, who had just been crowned 1997 Man of
the Year by the Ummat weekly.
Strikes
More gloom was predicted for Indonesia by East Java Police
Chief Maj. Gen. Mohammad Dayat who said in Surabaya yesterday
that the new year will be marked by even more strikes and forgery
problems.
He called on the province's police to be more alert to
anticipate possible social unrest and more crimes.
He told a year-end media conference that over the past year,
East Java saw 339 demonstrations -- 100 less than in 1996. "With
the current economic situation, we can expect more (labor)
strikes to take place next year," he said.
Among the most prominent strikes in East Java this year was
the one waged by some 40,000 workers of Indonesia's largest clove
cigarette company Gudang Garam.
Many demonstrations were also triggered by land disputes,
including cases that were dozens of years old.
"Land and labor disputes are always both local and national
issues," he said, adding that most labor strikes that had
occurred were triggered by demands for workers' normative rights
such as minimum wages and health benefits.
Dayat said the police had unveiled over the past year 113
instances of counterfeiting, an increase of 276.6 percent from
last year's 30 cases.
Of those cases, 88 had been solved.
"Those scams were mostly committed by former members of the
(outlawed) PKI (Indonesian Communist Party)," he said. "I believe
there will be more cases of counterfeiting next year because of
the economic crisis." (swa/nur)