Government vulnerable to new crony capitalism

The government is being increasingly challenged to show results of the eradication of corruption, collusion and nepotism after the recent Cabinet reshuffle, says economist Hadi Soesastro of the Jakarta-based Centre for Strategic and International Studies. The following is an excerpt of an interview with The Jakarta Post:

Question: Do you think the issues of corruption, collusion and nepotism (KKN) lead to the sacking of Laksamana Sukardi and Yusuf Kalla, respectively former state minister of investment and state enterprises development and minister of industry and trade?

Answer: The allegations of KKN are very serious. Unfortunately the procedure did not involve legal actions; KKN is not a political issue, it's a legal one.

But there's a lesson from this, that Gus Dur (President Abdurrahman Wahid) is being challenged to be serious through consistency in abolishing KKN. I think this is very important as the current government is very vulnerable to KKN.

Firstly because there are now so many political parties. They are all already preparing to contest the 2004 general election. They all have a tendency to loot the nation as the government remains, until now, the only financial source for the parties. The current government must realize this.

Secondly, the government is being challenged by the public, particularly after the Cabinet reshuffle, to come up with clear, efficient and proactive economic policies.

What is a proactive economic policy?

We can call it an activist policy. This means we select certain industries, give preferences to specific ones and promote them. But there's always danger in this while the government remains weak.

Such a policy tends to be misused as it provides justification for preferential treatment. Who can give justification to this weak government and governance? They will be your friends and cronies, just like what happened in the past. The sources of KKN are varied.

What should the government do?

The government, especially Gus Dur, must be very careful. I understand that there are already many people abusing Gus Dur's name as their patron, to win some deals including electricity projects. I don't know whether Gus Dur knows about this or not, but we must remind him that he once said that he had no problem meeting business people who wanted to see him, but not to give them any facilities.

Gus Dur and Laksamana sound like they're trading allegations of KKN. Your comment?

I think what Laksamana tried to question was why he was accused of something also done by Gus Dur (about the appointments of high-ranking officials). I find it very strange that Gus Dur used such an accusation. He seems to be misguided by certain groups; I don't know who.

How will all this affect the recovery of the economy?

This has created a lot of uncertainty again. It's going to prolong the recovery. When people see instability, they begin to question how we can begin to have an effective government.

It doesn't help the situation by getting rid of them (Laksamana and Kalla). They are not the main source of the problem. Businesspeople think that it's not the major restructuring issue of the government.

The public is also critical of professionalism. Market reaction was not so good after the appointment of the new ministers.

Do you think that the Indonesian Democratic Party of Struggle (PDI Perjuangan) and Golkar are serious about removing their cadres from the Cabinet?

No. It will just remain a threat. Both parties are reluctant to become the opposition. They want to have a part of the action for their own interests.

Does this mean that we are not ready for any opposition?

It's good to have opposition. Our situation is now a bit ambiguous ... the parties involved (in the cabinet) will support the government's policy.

But what we've seen now, from the beginning, is that (Cabinet ministers) are considered to be part of the coalition but they don't behave like they are.

Each of them takes their own way. So what is this, I don't understand; I see that some of the ministers are also not loyal to their own parties, because they want to stay in the Cabinet.

What should the Cabinet prepare?

There must be a national platform. So far, each of the ministers has gone their own way. Don't talk about the same perception and about not working together, because there has never been any platform.

They should sit together and agree to take measures and action. It must be clear what has to be done. Without any platform there may always be swinging like we've seen so far and everything just changes.

In a coalition government like this, the policies have to be a result of the regulations and compromises between the participating political parties.

It now seems like there's a wall standing between the executives and legislative body, even within the same parties. So it's just a mess.

What do you think will happen at the General Assembly in August?

I think there will be a compromise that it will only be to hear a report from Gus Dur. But it may end with an event to strongly criticize him if he fails to improve his governance from now until August. That would seriously affect his legitimacy. (I. Christianto)