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)